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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
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Week Ahead: Monday 4th – Friday 8th July
Economic Outlook

After a turbulent Monday, traders seem to have finally come to terms with the fact the Britain did indeed vote to leave the EU. Initially, we began the week the same as how we left the last; the selloff. However, once everyone had got out of their Brexit-exposed positions, the markets seemed to rethink the panic that had come before. Reality was sinking in, the UK may have voted to leave the EU, but with a lack of Article 50 they in fact are still very much a member of the trade bloc. Another speculated reason for the rebound was investors making the most of a cheap pound to buy up sterling-denominated stocks while they are relatively under-priced. Whatever the reason, it was not restricted to just the FTSE, as markets across the Western world made a comeback.

Politics seemed to have the most influence on the markets over the next few days, as the world played spectator to a barrage of high-profile speeches, both from the UK and abroad. George Osbourne kicked off the week attempting to instil calm, insisting there is still plenty of strength in the economy while siding with Cameron over delaying the trigger of Article 50 until the autumn. Angela Merkel took a solid stance against any informal negotiations with the UK until then. Even ex-Mayor of London Boris had a few words to say, after strongly backing the Leave campaign, he reassured the public that the markets were stable. It seemed stabilisation was to come, but not before some aggressive selling of the banking sector.

The EU member states called an emergency two-day meeting following the shock referendum result. The outcome of this meeting was almost a ditto of Merkel’s speech on Monday: further negotiations will not be held until the UK invokes Article 50.Devastating events in Turkey mid-week, where a terrorist attack left 41 dead in Istanbul’s airport, dragged down travel and tourism shares. Still, the bullish rally continued.

Worries of having to leave the single trade market has forced  The Bank Of England Governor Mark Carney to suggesting stimulus measures to help boost a weakening economy. An interest rate cut was also mentioned leading to a possible interest rate cut to below 0.5%, a record low for UK rates. The equity markets reacted positively to this early warning of a wave of QE. Combined with the likelihood of an interest rate cut over the summer months, cheap money in abundance is always a good thing for companies. A similar stance on Monetary Policy was taken by the European Central Bank on Friday, as they pondered looser rules for bond purchases. This came off the back of a fear that the ECB are running low on available debt to purchase under their current program.

The federal reserve have come out with a similar statement to what we’ve heard already, stating they are looking to raise interest rates but fear the economy is not performing as well as they would like, which has created a lot of speculation of what is to come. Let’s see how the U.S. stock market kicks off the second half of 2016 facing a huge ‘Wall of Worry’, some analysts may say.

This week’s major economic releases include:
Monday -USD Independence day; AUD Building Approvals (MoM); SEK Interest Rate Decision; GBP Construction PMI; EUR PPI (MoM & YoY); NZD NZIER Business Confidence (Q2)

Tuesday - AUD Retail Sales; AUD Trade Balance; AUD Interest Rate Decision; EUR Spanish Services PMI; EUR Italian Services PMI; EUR French Services PMI; EUR German Services PMI; EUR Markit Composite PMI; EUR Services PMI; GBP Services PMI; EUR Retail Sales (MoM & YoY); USD Factory Orders (MoM)

Wednesday -Eid al-Fitr holiday; EUR German Factory Orders (MoM); SEK Interest Rate Decision; USD ADP Nonfarm Employment Change; CAD Trade Balance; USD Trade Balance; USD Markit Composite PMI; USD Services PMI; USD ISM Non-Manufacturing Employment; USD Non-Manufacturing PMI

Thursday -EUR German Industrial Production; CHF CPI (MoM & YoY); GBP Halifax House Price Index (MoM & YoY); GBP Industrial Production (MoM & YoY); GBP Manufacturing Production (MoM & YoY); EUR ECB Publishes Account of Monetary Policy Meeting; CAD Building Permits; USD Initial Jobless Claims; CAD Ivey PMI; USD Crude Oil Inventories

Friday - JPY Current Account n.s.a; CHF Unemployment Rate n.s.a; CHF Unemployment Rate s.a; EUR German Trade Balance; GBP Trade Balance; GBP Trade Balance Non-EU; CAD Unemployment Change; CAD Unemployment Rate; USD Average Hourly Earnings; USD Nonfarm Payrolls; USD Participation Rate; USD Private Nonfarm Payrolls; USD Unemployment Rate; USD Baker Hughes Rig Count; CFTC Speculative Net Positions

Equities Outlook 

Just as the markets moved in tandem, this report will summarise their week as such. The main European indices opened above Friday’s close just below the 6,000-mark but carried on in that direction for much of Monday’s session, reaching a low of 5,882.8, with the FTSE closing marginally up at 6,006.3. The Dax, meanwhile, had a torrid time on Monday, falling as low as 9,213.3. The German index managed to retrace some of this slump, but remained in the red for the session.

The rest of the week saw the markets rally, finding momentum from stalling Brexit negotiations and a sense that central banks were looking to act rapidly on the UK’s decision to leave. The FTSE rallied the rest of the week, closing at a 2016 high of 6,577.83, erasing all post-referendum losses. The German Dax followed suit to finish a turbulent fortnight up at 9,776.12.

US markets felt the brunt of UK leaving the EU, more then what was imagined by investors, as all three of the major indices started the week lower. The Dow almost hit as low as the 17,000 level, S&P 500 going slightly below the 2000 level and also the NASDAQ dropping to as low as 4,181. Tracking the European indices, they found strength throughout the week aided by strength in oil and precious metals and expectations for more accommodative policies from global central banks grew. As investors finally realised the effects of Brexit were not as devastating as first thought, the US indices recovered most of the losses and met levels they were at from before the referendum. After shrugging off the losses they managed to post their best weekly gains of the year with both the Dow and S&P up 3.2%. The Dow finished up at 17,949.37, with the S&P settling above that all-important 2,100 level at 2,102.95. The Nasdaq Composite saw the largest upswing of 3.3% for the week, to 4,862.57.

In the wake of Brexit, one of Britain’s biggest companies Vodafone was in the headlines last week. The telecoms giant warned that it could relocate its head office outside of the UK, if the negotiations for a post-Brexit Britain do not give it freedom of movement across the EU for people, capital and goods.  Vodafone said it would take “whatever decisions are appropriate” once the outcome of the negotiations are known and employs 13,000 in the UK. However, Vodafone had a positive week with share prices starting at 211.00 pence per share, and finishing close to 230.00. The two day meeting between EU members  at the start of the week did not give a positive look at this as the UK were not granted access to the single trade market unless they agreed to EU immigration policies, a strong reason for the UK leaving the EU.

The idea of relocating head offices to an EU nation is also being considered by EasyJet. The budget airline is known for leading the market in cheap short-haul flights around Europe, and so it would make sense for the Luton-based firm to have operations both inside and out of the bloc as a fallout in case the UK cannot negotiate terms to remain in the EU’s airspace. EasyJet reassured it’s staff at their current headquarters that, in the event of the move they would not be at risk of job loss, as the bulk of operations would still be carried out by the Bedfordshire-based staff.

Sainsbury’s will hold its annual AGM next week on Wednesday 6th of July. The second largest chain of supermarket sector in the UK posted a strong week rising to 234.00 pence per share on Friday after beginning at 222.90 on Monday.

Commodity/ FX Outlook


Oil futures had a turbulent week due to many fundamental factors affecting supply and demand. On the supply side, a lack of major attacks to Nigerian pipelines has restored their output, weighing on crude prices. The Canadian wildfire incident seems to be under control, allowing workers to slowly get back to it. This again will put downward pressure on the liquid commodity. All of this spells trouble for Venezuela, whose continuing turmoil is mainly due to prices. For a country that requires crude in the $100-plus zone, and with no other way to repay it’s debts but with oil, it seems they are running out of time to think of a solution.

 On the demand side, inventories played a major role this week, coming out far lower than many analysts expected. The prediction was to see a decrease of 2.365 million, which is why crude prices leapt up when a figure of -4.1 million was announced. A weak US dollar has also been beneficial for all dollar-denominated assets, such as oil and metals.

Oil entered the week at $48.68 but was seen souring to as high as $51.32 rebounding from a Brexit-fuelled selloff it sent crude futures to a seven-week low, investors fearful of a global slow down. Throughout the week we have seen some huge swings. Brent managed to settle above that all-important $50 mark, closing at $50.35. US Crude made it’s first weekly gain for three weeks, closing up $1.18 for the week at $48.99 a barrel.


As uncertainty gripped the markets in the wake of the referendum, gold held its highs from Friday’s close, spending much of the week around the $1,320 an ounce region.

 Many analysts believe that rising interest rates make bonds and other fixed income investments more attractive, meaning money will flow into higher-yielding investments, such as bonds and money market funds. This will take investments out of gold, weakening the precious metal.   

Gold has seen a week full of gains, rising from $1256.77 on the 23rd June to end the week over $1,3257.60. The sharp rise in the precious metal was seen after the EU referendum which voted UK out of Europe. Cautious investors looking for a safe haven piled there funds into the yellow metal as falling markets sent alarm bells ringing.

With all eyes on economic data from the US this week, these non-farm pay rolls may be the most important of all so far. This will give a much clearer indication in regards to an interest rate rise and give investors more of a direction. Last month’s unbelievably bearish numbers seem to have been brushed off with the EU referendum results becoming the main concern.

Silver had a triumphant week, gaining almost $4 in a rally which began on Tuesday. The exponential rise seen was topped by a 7% increase during Asian trade last night alone, as Silver briefly broke through the $21 barrier. Considering it spent the majority of the week hovering around $18 this was a stark reminder of the volatility this metal can provide.


The pound followed the same pattern as the FTSE this week, suffering a continued selloff Monday, but as with the stock index, Tuesday was the day of change. The pound regained some strength against its peers for two straight days as the pessimism surrounding the Brexit vote faded. Despite the talk of Quantitative Easing from the BoE, the pound continued to strengthen against most other currencies, purely due to the low levels it had found itself. The pound remained in a tight trading range against the dollar between $1.31 and $1.35.

The dollar eased against most of its counterparties in Friday’s session, as they gear up for a 4th of July holiday today. For the most part of the week, though, the dollar gained strength as the markets priced in the great unlikelihood of a rate hike this year. In fact, many are now predicting a rate cut from the Fed before the year’s end. The EURUSD pair has remained one of the most volatile post-referendum. Monday saw plenty of zig-zagging as the euro just managed to edge out a gain against the greenback for the day. Then, as with the pound, Tuesday and Wednesday saw a strong rally from the pair.

Some relief came for the export-orientated Japanese after the yen weakened against the dollar throughout the week. Monday-Thursday saw a narrow but steady uptrend, as the pair recovered from below $100 to spend the majority of the week in the $102-103 band. Unfortunately for Japan, who aim for a weak yen to ensure its exports stay competitive, its currency is often seen as a safe haven in times of uncertainty, providing unwanted strength when things get heated.


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Posted by Michael Campbell

Category: Weekly Bulletin

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