Incisive market commentary from David Morrison

Stay ahead with our market commentary and webinars from our in house market strategist

Open a Live AccountOpen a Demo Account
+ Show blog menu



Expand 2017 <span class='blogcount'>(348)</span>2017 (348)
Collapse 2016 <span class='blogcount'>(483)</span>2016 (483)
Expand December <span class='blogcount'>(23)</span>December (23)
Expand November <span class='blogcount'>(41)</span>November (41)
Expand October <span class='blogcount'>(37)</span>October (37)
Expand September <span class='blogcount'>(41)</span>September (41)
Expand August <span class='blogcount'>(52)</span>August (52)
Collapse July <span class='blogcount'>(38)</span>July (38)
Dark clouds ahead?
29 Jul 2016
BOJ underwhelms – JPY soars
29 Jul 2016
PM Bulletin: BOJ look-ahead
28 Jul 2016
AM Bulletin: FOMC leaves rates unchanged
28 Jul 2016
PM Bulletin: Yen swinging wildly on stimulus talk
27 Jul 2016
AM Bulletin: Fed rate decision and FOMC statement in focus
27 Jul 2016
PM Bulletin: FOMC look-ahead (and Japanese stimulus talk)
26 Jul 2016
AM Bulletin: FOMC meeting begins today
26 Jul 2016
Platform Tours: CFD Trading - Check Open P & L
25 Jul 2016
PM Bulletin: EURUSD breaks below 1.1000
25 Jul 2016
Weekly Bulletin: Fed and BOJ in focus
25 Jul 2016
PM Bulletin: Sterling looking vulnerable again
22 Jul 2016
AM Bulletin: Stocks lower as oil weighs
22 Jul 2016
PM Bulletin: The EURUSD and the ECB
21 Jul 2016
AM Bulletin: ECB rate decision ahead
21 Jul 2016
PM Bulletin: ECB look-ahead
20 Jul 2016
AM Bulletin: Q2 earnings keep markets buoyant
20 Jul 2016
PM Bulletin: A look at the yen
19 Jul 2016
AM Bulletin: More records for US equities
19 Jul 2016
PM Bulletin: Precious metals pull back
18 Jul 2016
Weekly Bulletin: It’s all about stimulus
18 Jul 2016
PM Bulletin: European banks in trouble
15 Jul 2016
AM Bulletin: Sombre mood following Nice atrocity
15 Jul 2016
PM Bulletin: The BoE rate decision
14 Jul 2016
AM Bulletin: All eyes on Bank of England
14 Jul 2016
PM Bulletin: BoE Rate Decision in focus
13 Jul 2016
AM Bulletin: Equities drift lower after record US close
13 Jul 2016
PM Bulletin: Global indices pushing higher
12 Jul 2016
AM Bulletin: Equity rally powers on
12 Jul 2016
PM Bulletin: Fresh record high for S&P500
11 Jul 2016
Weekly Bulletin: The markets called, NFPs answered
11 Jul 2016
AM Bulletin: The calm before the storm; Markets await today’s NFPs
08 Jul 2016
PM Bulletin: Non-Farm Payroll look-ahead
07 Jul 2016
AM Bulletin: As the Fed turns dovish, the markets turn bullish
07 Jul 2016
AM Bulletin: Concerns continue as Sterling touches $1.27
06 Jul 2016
AM Bulletin: Markets open higher, weak UK Construction PMI data removes confidence
05 Jul 2016
Weekly Bulletin: Central Banks react to Brexit vote
04 Jul 2016
AM Bulletin: When Carney speaks, the markets listen
01 Jul 2016
Expand June <span class='blogcount'>(42)</span>June (42)
Expand May <span class='blogcount'>(42)</span>May (42)
Expand April <span class='blogcount'>(45)</span>April (45)
Expand March <span class='blogcount'>(41)</span>March (41)
Expand February <span class='blogcount'>(42)</span>February (42)
Expand January <span class='blogcount'>(39)</span>January (39)


Indices update

European markets were seen finishing sharply higher, heightened by a rebound in the financial sector. The FTSE 100 jumped by 1.1% to close at 6,533.79. Shares of asset managers and insurers have been falling in recent days on concerns that their exposure to the UK real estate market. Several UK property funds have suspended trading due to a rise in redemptions after the Brexit vote.  Prudential PLC was seen rising by 2.43% after a three-session losing streak, also among the gainers within the FTSE 100 were Standard life PLC seen jumping by as much as 2.4% but settled the day up 0.72%. Aviva also ended their three-session losing streak they added 1.84%. The banking sector saw strong gains with RBS, Lloyds and Barclays, up 6.5%, 4.5% and 2.4% respectively, erasing all losses earlier in the week. UK industrial production figures were released for May, showing a 0.5% decrease after two straight months of expansion. This figure was still much better than expected, with analysts forecasting a drop of 1%.

Germany’s DAX increased gradually Thursday ahead of key US data, as concerns over Britain’s decision to leave temporarily subsided. The DAX gained 0.40%.  Food & beverages, utilities and technology gained, leading the index higher. Included in these stocks was RWE AG, which increased by 4.47%. Also helping to boost the DAX was Infineon Technologies AG, which closed up 1.75% at 12.220 in late trade. Minutes from the 1st-2nd June ECB meeting were released to the public during the European session. One thing to note about this report is that the meeting took place well before the referendum vote, which was a hot topic for the bank. There was widespread unease amongst members, fearful for the effect a Brexit vote would have on Eurozone growth.

US stocks moved down in conjunction with oil prices, as investors took a cautious approach in the run up to today’s Nonfarm Payrolls. ADPs released Thursday exceeded analyst’s expectations of 159k, coming in at a healthy 172k. Yet traders are not quick to forget May’s shocker, as ADPs called 168k while NFPs rocked the markets coming out at a mere 38k – its lowest reading since June 2011. After the Fed’s dovish take on current market conditions, it is highly unlikely that a strong NFP result would have investors seeing a rate hike on the horizon, so we could see the dollar gain even more strength against its counterparties. The Fed, however, is known for data-watching, so expect this result to be mentioned in their next speech. Meanwhile, a lower than expected decrease in US oil stockpiles caused crude to fall. The Dow tanked 100 points to a session low before gaining some ground to settle down 0.3% at 17,859. The S&P saw the same decline, dragged into negative territory by telecoms and utilities, usually fairly secure sectors in the broad index. The Nasdaq Composite managed to escape the bears’ multiple attacks, swinging throughout the day to end up 0.2% at 4,869.

In the Asian session, the yen’s strength continued to thwart all attempts by Japanese stocks to end in the green. Despite some early gains, the Nikkei finished the session down 0.7%. Japan will be reliant on solid NFPs soothing the global economy to allow the yen to weaken. As an export-oriented economy, Japan struggles to compete in the global markets with a strong currency. Other Asian markets saw a bit more positivity, with the Hang Seng up 1% and China’s Shanghai Composite ended flat.

Equities update

Marks & Spencer managed to erase losses which stemmed from same-store sales tumbling 8.9% in Q1. The department store/supermarket is standing behind the strategy put in place by their new CEO of blending high quality goods at low prices. It’s shares managed a rebound into positive territory, up 1.6% at the close in London.

Associated British Foods, the owner of Primark, enjoyed its best session in 16 years as the low value of the pound spells great news for its exports of sugar, cereal and other foods. The company initially predicted a fall in adjusted per-share earnings for the year, but has since backtracked to say they are on course to avoid any slump. On the back of this news, its share price shot up to close 8.9% higher.

One stock pulling the FTSE 100 down was Sports direct their shares plummeted by 3.26%. The company posted a 0.5% decline in core earnings with the official figure at £381.4 million for the year. This came at the bottom end of the guidance given early this year.

Commodities update

Oil prices suffered during Thursday’s American session, as US crude inventories missed the mark slightly. Analysts had predicted a decline of 2.250 million barrels, yet they could only manage a drop of 2.223 million barrels. This is still progress in the right direction, as it marks the seventh consecutive week of declines in stockpiles, yet concerns over a contraction of global energy demand meant this was enough to warrant a selling session. By the close in New York both contracts were down almost 5%. Brent was trading down $2.40 at $46.40 while US crude exchanged hands down $2.29 at $45.14.

Spot Gold lost a small fraction of its worth overnight, as investors slowed the pace ahead of this month’s Nonfarm Payrolls later today. Indicative data has pointed to a solid rebound in job growth for the US. Gold remains on track for its sixth straight week in positive territory, holding strong at $1,358.36, down only 0.1% for the overnight session. Silver was seen trying to push back towards the $20 mark, settling up 0.4% at $19.73.

Forex update

The European session saw the pound finally grow a backbone as the hard-hit currency broke through the $1.30 mark. The euro dropped against the dollar, moving from $1.1097 late Wednesday to reach $1.1069 while the Americans slept, and when they awoke this move extended down to $1055.

During the US session, money was once again moving from the dollar and piled into the yen, as the safe haven currency was trading against the greenback at ¥100.77 by the close in New York. The dollar did manage to regain some lost ground against the pound, making its sty above $1.30 a short-lived one. The one saving grace for sterling is that it remains well above the 31-year lows it saw a day earlier. Against the will of all Japanese exporters, the yen still managed to strengthen further overnight, reaching a high of ¥100.60 against the dollar.

Upcoming events

Overshadowing all other data today is the big one; Nonfarm Payrolls. Everyone will be hoping to avoid a surprise like last month, with predictions up at 175k. The US Unemplyment rate should be released at the same time, with the general consensus of a 4.8% result seeming fair. Also on the agenda is the Baker Hughes US Oil Rig Count, along with several bits of data from Germany, including Trade Balance and month-on-month Exports. 

Spread Co is an execution only service provider. The material on this page is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by Spread Co Ltd or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.


Posted by Michael Campbell

Category: AM Bulletin

Add a comment Add comment            


© 2018 Spread Co Limited. All Rights Reserved.

Spread Co Limited is a limited liability company registered in England and Wales with its registered office at 22 Bruton Street, London W1J 6QE. Company No. 05614477. Spread Co Limited is authorised and regulated by the Financial Conduct Authority. Register No. 446677.

Spread betting and CFD trading are leveraged products and can result in losses that exceed your deposits. Ensure you understand the risks.

Losses can exceed deposits. Click here to learn more.