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Bounce in oil helps to steady equities - AM Briefing
30 Mar 2017
US stock indices consolidate - Video Update
29 Mar 2017
Risk appetite returns - AM Briefing
29 Mar 2017
S&P500 - Topping out, or consolidating? PM Bulletin
28 Mar 2017
Risk appetite returns after the Trump wobble - AM Briefing
28 Mar 2017
Beware hidden relationships between seemingly unrelated markets - Trading Guides
27 Mar 2017
Risk assets slump in wake of Trump’s healthcare debacle - AM Briefing
27 Mar 2017
Congress vote puts markets on hold - AM Briefing
24 Mar 2017
Markets on hold ahead of crucial vote - Video Update
23 Mar 2017
Tranquil markets await big data - AM Briefing
23 Mar 2017
Investors rattled after equity sell-off - Video Update
22 Mar 2017
US Markets Snap 109-Day Streak - AM Briefing
22 Mar 2017
Crude oil update - PM Bulletin
21 Mar 2017
European markets stable on the open - AM Briefing
21 Mar 2017
Dollar slips after G20 communique - AM Briefing
20 Mar 2017
FOMC post-mortem - Video Update
16 Mar 2017
Rate hike sends stocks higher - AM Briefing
16 Mar 2017
FOMC rate decision and Dutch election in focus - Video Update
15 Mar 2017
Oil rally gives markets lift - AM Briefing
15 Mar 2017
Crude trades at lowest levels since production cut agreement - PM Bulletin
14 Mar 2017
Politicians take centre stage again - AM Briefing
14 Mar 2017
Trading Psychology: Risk Management - Trading Guides
13 Mar 2017
Article 50 deadline approaches - AM Briefing
13 Mar 2017
European stocks push higher after Draghi’s hawkish stance - AM Bulletin
10 Mar 2017
Non-Farm Payroll look-ahead - PM Bulletin
09 Mar 2017
Fed rate hike seems certain - AM Briefing
09 Mar 2017
Market expects Fed to hike rates next week - Video Update
08 Mar 2017
Another twist in the French election - AM Briefing
08 Mar 2017
Odds slashed on Fed rate hike - PM Bulletin
07 Mar 2017
Investors lacking direction this morning - AM Briefing
07 Mar 2017
Fibonacci Retracement - extensions - Trading Guides
06 Mar 2017
Equities slip in early Monday trade - AM Briefing
06 Mar 2017
Modest profit-taking sees US indices post rare loss - AM Briefing
03 Mar 2017
Crude struggles to break above resistance - Video Update
02 Mar 2017
UK baffled by the origins of their favourite brands - PM Bulletin
02 Mar 2017
Fresh record highs for major indices - AM Briefing
02 Mar 2017
All eyes turn to the Fed - Video Update
01 Mar 2017
Markets react positively to Trump speech - AM Briefing
01 Mar 2017
Expand February <span class='blogcount'>(36)</span>February (36)
Expand January <span class='blogcount'>(39)</span>January (39)
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Early moves

European markets cautious on the open

Tension increases in Far East

Very little movement on the European open this morning, with nothing but a handful of corporate releases for investors to ponder in London. The biggest movers on the FTSE are in the red, with Worldpay leading the pack down. Rather than a lack of inspiration, the markets may be rather cautious ahead of Phillip Hammond taking the throne to deliver the budget tomorrow. A similar story can be heard in continental Europe, where the imminent release of Eurozone GDP dampened volatility early on, only for the figures to come in exactly as expected. Even the might of the German Dax is struggling to gather ground in either direction, trading within an unusually tight range for the notoriously explosive index. Yesterday’s tumble in financials, led by Deutsche Bank, has left everyone exhausted.

Overnight saw a similar story to Monday’s European and US markets, with financials dragging the markets lower. Some indices less financially-weighted managed to eke out small gains, but there is still a sense of unease due to tensions with North Korea. The US began deploying missile defense systems in South Korea in response to the recent missile tests out of North Korea, a move that both the North and China allegedly perceive as a threat. Both countries have openly opposed the missile defense system, with some South Koreans stating it is already beginning to affect trade with China.

Aside from these issues, one of the big talking points among investors is still the Fed interest rate decision next week, with many hoping a strong Nonfarm Payroll this Friday could seal the deal.

Stock Market Update

Deutsche Bank market cap tanks

Deutsche Bank’s announcement of an $8.5 billion share sale may have done more harm than good, at least in the short term, after the bank’s share price saw a 7.9% selloff yesterday, erasing over $2 billion from its market cap. Even this morning the downturn continues, albeit a much tamer slide. Investors deem the upcoming rights issue, the lender’s third in the past four years, simply confirmed beliefs that the bank is low on capital. Citigroup analysts remain in their view to sell any Deutsche Bank shares, standing by their decision to rate the bank a high risk trading option, and believing that $8.5 may still not be enough to clear up their struggling balance sheet.

Commodities Update

Gold brawls with the bears

Oil recovers slightly from earlier slip

Gold prices remain bogged down by the high expectations of a Fed rate hike next week. According to some measures, the markets are pricing in up to a 90% chance of a hike in the March meeting, with the likelihood of a second hike in September allegedly over 65%. A rise in rates raises the opportunity cost of holding gold, whilst strengthening the dollar in which it is priced to push it down further. For now, at least, gold is still very much in that familiar range we’ve seen since last Friday. Silver prices have followed gold downwards, with copper joining the decline as a whole host of metals lost ground this morning.

Oil prices continued the downward trend early this morning, as investors remain wary of oversupply in the US and a bleak forecast for economic growth in China. However, there are some out there who believe the slump in Chinese demand is only temporary, with a view that infrastructure expenditure will receive a boost and demand for crude will go with it. For the short-term investor though, all eyes are watching the Fed, as with metals, a rate hike creates a stronger dollar, and a stronger dollar leads to downward pressure on oil. Mixed opinions may explain the slight recovery in oil prices we’ve seen since the initial early morning decline.

Forex Update

Dollar flat as Fed rate decision looms

Market consensus continues to price in a Fed rate hike for next week, with the dollar barely moving against its counterparts. Investors are also playing the waiting game on the Trump administration, who are yet to push ahead with their economic plans for his tenure. One thing to note in the currency markets may be the slight weakness seen in the Yen this morning, as the safe haven appears to be too safe for some traders out there.

Upcoming Events

Today’s significant economic data releases and events include US Trade Balance early afternoon followed by Consumer Credit data later on, both releases for the month of January. Later on this evening we also have a flurry of GDP data from Japan.


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Posted by Michael Campbell

Category: AM Bulletin

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