Market Insights & Analysis

Read our analysts' daily briefings, together with our Market Snapshot reports.

22 Feb 2016 08:07

The pound sterling traded back towards a three week low against the dollar as Brexit fears saw investors pull out of the currency. Japanese PMI data released in the early hours of the morning saw manufacturing activity slow sharply in February. Despite the less than impressive Japanese PMI data, Asian equity market started the week on the front foot.

18 Feb 2016 08:39
Front month Brent futures rebounded yesterday, offering additional stability to global equity markets which in recent weeks have been highly correlated with crude oil futures. Chinese inflation data came in broadly in line with expectations as data for January released overnight saw consumer price growth quicken, increasing 1.8% y/y from last month’s reading of 1.6% y/y. Today’s eurozone monetary policy meeting and release of eurozone December current account data will provide some interesting insights and data points for investors.
17 Feb 2016 08:19
Three month LME nickel futures managed to hold onto previous gains yesterday as prices opened firmly around the previous session’s close and traded towards $8,350/tonne. For now though, Chinese investors seem cautiously optimistic as risk appetite fuelled by PBOC assurances and positive sentiment after the Chinese New Year conflicts with Chinese debt concerns. Spot gold prices gained some support towards $1,200/oz during overnight trading despite moves lower testing appetite for prices around $1,190/oz. Front month Brent crude futures struggled to push past the 50 day moving average yesterday as the global benchmark was subjected to a protracted sell-off throughout much of the day.
16 Feb 2016 08:28
Chinese data released yesterday and overnight signalled towards a more upbeat outlook than previously expected as Beijing’s efforts were slowly starting to leave a lasting effect. The spot offshore yuan exchange rate snapped a nine session bull run against the USD overnight as risk aversion continued to dissipate steadily, providing support for the dollar to regain some of the recent losses. Crude futures have extended gains for a third straight session with activity overnight and early this morning seeing front month Brent futures post firm gains and stabilise around $35.40/bbl early on.
15 Feb 2016 08:30
Bullish moves for LME nickel prices overnight with the three month rolling forward garnered support at Friday’s close and rallied as much as 5.6% higher overnight as Chinese investors returned to market after the week long Chinese New Year celebrations. Comments from PBOC governor Zhou Xiaochuan over the weekend went some way to calm markets, with the mood across Asia at the start of the week largely upbeat. In a sign that market sentiment was improving gold prices plummeted almost 2% overnight, adding to Friday’s modest losses as appetite for risk displayed a market improvement at the start of the week.
12 Feb 2016 08:27
The offshore Chinese yuan exchange rate gained further ground against the dollar overnight, tracking much of the region’s equity benchmarks and currencies lower as the global sell-off showed no signs of stopping any time soon. Front month WTI futures traded at their lowest level in twelve years yesterday as the US benchmark posted losses for the sixth straight session as the rout continues. Ongoing dollar weakness bizarrely offered very little support to commodities prices this week and concerns of a market-to-real economy feedback loop could gain traction if the current dynamics persist.
11 Feb 2016 08:40
Janet Yellen gave testimony to the House Financial Services Committee yesterday and as expected, played down the likelihood of another interest rate rise in March. The weaker dollar failed to offer much support to the base metals complex with zinc and tin the only two registering gains on the day. Front month Brent futures continue to trade under pressure this week but support around the $30-$30.50/bbl level continues to hold up well.
10 Feb 2016 08:36
LME three month copper prices had near term support kicked from underneath them yesterday as prices closed over 2% lower on the day, breaching near term support at the 50 day MA which we had anticipated to hold up well given Monday’s cautious session. The dollar index extended declines yesterday after some brief consolidation around the 200 day MA over the past few sessions, targeting a close just above 96.000. Gold prices look to have hit a ceiling with prices struggling to lift much higher yesterday, end the session around $1,190/oz with activity early this morning stabilising around these levels.
09 Feb 2016 08:22
The yen resumed its run of strength against the dollar after a brief respite around 117.00 late last week as well as early moves yesterday giving back some of the previous week’s gains towards 117.50. 10 year Japanese government bond yields declined to unprecedented levels, dipping into negative territory in a steady decline since the start of the month.
08 Feb 2016 08:27
As expected Asian trading was subdued as the week long New Year celebrations in China kicked off, with very little of note to report overnight. Saudi Arabia’s oil minister, Ali al-Naimi announced that talks held with his Venezuelan counterpart, Eulogio Del Pino, were “successful” as OPEC members increasingly step up efforts to bolster the crude market. China’s foreign exchange reserves continue to decline as the impact of the considerable efforts the PBOC have had on the world’s largest currency reserve come to light.
05 Feb 2016 08:36
Spot gold prices extended gains yesterday after breaching the 200 day MA as the precious metal rallied just over 1% on safe haven buying. The dollar extended declines against a basket of major currencies yesterday, registering its worst performance since the financial crisis as the dollar index lost as much as 1%, compounding the previous session’s losses and breaching the 200 day MA. Investor attention will be firmly focused on today’s release of December US trade data which investors anticipate will show a slight increase in the trade deficit as a stronger dollar hindered exports.
04 Feb 2016 08:27
Three month LME zinc prices rallied for the fifth straight session as a sharp sell-off in the dollar against a basket of major currencies as well as improving fundamentals in China buoyed demand for the metal. The Bank of England’s MPC are due to release their base rate decision later today which the majority of market participants expect to remain unchanged at 0.5%.
03 Feb 2016 08:18
The bearish outlook continued to dominate investor sentiment as the sell-off in Asian equity markets extended overnight, prompted by crude oil futures posting fresh losses. Appetite for the USD remains firm with the dollar index trading confidently above 98.700, remaining well supported towards the 50 day MA against a basket of major currencies. Safe haven assets were buoyed by the extended sell-off in Asian equity markets as the Japanese yen strengthened for the third straight session against the dollar.
02 Feb 2016 08:35
Jittery investors saw mixed trading during the Asian trading session as continued support by the PBOC saw mainland Chinese equity benchmarks rise against a backdrop of weaker stocks across the region. In a further sign of the cautious outlook adopted by many investors spot gold prices extended gains yesterday, rallying towards $1,130/oz yesterday on a combination of investment and physical demand. Front month Brent futures snapped a four day rally yesterday after briefly trading towards a four week high as investors took an opportunity to bank profits.
29 Jan 2016 08:21

The Japanese yen weakened significantly overnight against the dollar after the Bank of Japan surprised market participants with additional monetary easing. Japanese bond yields dropped sharply on the announcement with ten year government bond yields dropping to a record low of 0.100% from a high of 0.230%. Today’s session sees the release of US Q4 GDP data and investors are hoping that the advanced reading for the final quarter of last year will offer some stability and encouragement to risk appetite.

27 Jan 2016 08:31
Front month crude prices managed to recover the majority of Monday’s losses during yesterday’s trading session as investors viewed the sharp sell-off at the start of the week as overdone. Gold prices managed to hold onto yesterday’s gains as global growth concerns saw investors continue to pile into the safe haven asset. Chinese imports of copper rose to their highest level since December 2011 as customs data released yesterday saw the world’s second largest economy import just over 423K tonnes of the red metal.
26 Jan 2016 08:20
The brief glimmer of optimism faded overnight as the rally in risk assets that had seen last week’s bullish activity spill over to the start of this week lost steam. Spot gold prices managed to post a close above key resistance at the 100 day MA yesterday as nervous investors saw haven demand for the precious metal improve. Following on from last week’s ECB meeting, President Mario Draghi offered markets additional insight into the central bank’s outlook for the year ahead.
25 Jan 2016 08:43
Front month crude oil futures ended the week on a high note as Brent contracts for March delivery rallied back above $30/bbl, ending the session 8.6% higher. Persistent global growth concerns have shored up investment support for gold as the previous metal rebounds back above $1,100/bbl at the start of this week. The steel market in China was offered some encouragement after Premier Li Keqiang promised additional cuts to capacity as efforts to restructure the world’s biggest steel industry continue.
22 Jan 2016 08:25
The ECB signalled toward more QE as President Mario Draghi set the stage for more stimulus, citing China’s economic slowdown and persistent market volatility throughout the second half of 2015 as factors threatening the eurozone’s recovery. Front month WTI futures ended firmly higher yesterday, posting strong gains and ending the session over 11% higher compared to Wednesday’s close. A busy day for economic activity today as investors after assessing eurozone PMI data will have UK retail sales and UK public finances data to pore through.
21 Jan 2016 08:29
The PBOC once again stepped up efforts to shore up capital markets as it injected 400bn yuan (roughly $60bn) into financial markets using reverse repo agreements. Risk aversion prompted continued buying of gold as jittery investors piled into the safe haven asset. The dollar remains very much in vogue despite struggling with direction in recent sessions as it remains well supported towards the 50 day moving average.
20 Jan 2016 08:51
The pound sterling dropped to its lowest level against the USD since 2009 yesterday as Bank of England Governor Mark Carney signalled that it was too soon to consider a rates rise, pushing back the expectation further. Crude oil came under renewed pressure yesterday as Brent front month futures attempted to recover back above $30/bbl, however, these efforts were in vain as markets slid lower giving back the majority of the day’s gains. Spot gold prices rallied strongly overnight and early this morning as the safe haven asset traded back above $1,096/oz.
18 Jan 2016 08:48
Spot iron ore prices stabilised above $40/tonne last week as the steelmaking raw material faced another week of under pressure prices. Front month Brent futures slipped to a fresh multi-year low on Friday as the bears dominated the entire session, pushing the global crude benchmark as low as $28.82/bbl. A quiet session for economic data today and with a US market holiday for Martin Luther King Jr. Day we anticipate a relatively subdued European session.
15 Jan 2016 08:42
The upbeat mood on Wall Street failed to carry over to the Asian session as benchmark equity indices across the region ended the week on the back foot, capping what has been a volatile second week of the year. A choppy week for the yuan as the offshore exchange rate gave back more of the week’s earlier gains with moves overnight pushing the Chinese currency towards 6.6160 against the dollar. Another engaging day in terms of macro data, not that the majority seem to be paying any attention, with US data dominating the day’s releases.
14 Jan 2016 08:59
Front month Brent futures dipped below $30/bbl for the first time since 2004 as expectations that Iranian crude could soon be hitting the market dampened investor sentiment. The dollar remains well supported above the 50 day moving average as confidence in the US economy continues to build. Today is a somewhat busier session for economic activity with the Bank of England interest rate decision expected at midday followed by a string of US economic indicators.
13 Jan 2016 08:49
Another mixed session for Asian equity markets as Chinese trade data released overnight saw a bigger than expected surplus in December and PBOC intervention saw the onshore and offshore Chinese yuan exchange rates converge. Front month WTI prices dipped below $30/bbl yesterday, and the world went crazy. It spent all of two minutes trading just below this ominous level before recovering towards $30.44/bbl at the close. Today’s data will be of particular interest, with the EIA set to release their weekly crude oil inventory statistics this afternoon.
12 Jan 2016 08:38
Asian equity markets posted mixed results overnight as Japanese stocks headed lower for the sixth straight session after the long weekend and Chinese mainland stocks pushed tentatively higher. The yuan has had a very tumultuous start to the year and yesterday’s session was no exception as the offshore yuan exchange rate gained 1.4% against the dollar with much of the strength came throughout the European session. Gold struggled to hold onto support above $1,100/oz yesterday as resistance at the 100 day MA capped any intraday gains and investors believed the recent rally from $1,060/oz since the start of the year was overdone.
11 Jan 2016 08:29
Another rocky start for Asian equity markets with mainland Chinese equity indices closing 5% lower during overnight trading as the nervous trading conditions and risk off approach by investors showed no signs of letting up. Despite the overall risk off mood permeating through Asian markets the offshore yuan exchange rate offered further indication of stability after the PBOC kept the daily fixing for the currency firm for a second straight session. The risk off appetite spurred demand for gold as the safe haven asset remained well supported around $1,105/oz early on today.
08 Jan 2016 08:34
Chinese markets began to show some signs of stability overnight, much to the relief of anxious market participants after a bearish start to the year which saw the benchmark Shanghai Composite and CSI 300 indices lose over 12% apiece this past week. It would appear that doing less is more in this regard and while policymakers in Beijing have shown an increasing willingness to prop up financial markets this over reliance on the Beijing put may in some cases be making the situation worse. Front month Brent futures hit a fresh eleven year low yesterday towards $32,16/bbl as prices surpassed the trough seen during the global financial crisis.
07 Jan 2016 08:28
Chinese equity markets were shuttered barely half an hour after opening as circuit breakers were once again triggered after a precipitous 7% drop in the CSI 300 benchmark index. With policymakers at the PBOC stepping up intervention and expressing their willingness to allow the currency to materially weaken we will likely see further currency volatility as confused market participants slowly lose confidence in the central bank’s ability to shore up capital markets. The World Bank has cut its global growth forecast to 2.9% for 2016 from its previous forecast in June of 3.3%.
06 Jan 2016 08:15
The onshore yuan exchange rate dropped to a fresh multiyear low against the USD as the PBOC cut its daily fixing for the currency, a surprise move that caught many investors off guard. Yen strength continued on the Chinese central bank’s intervention, gaining on the dollar for the third straight session as moves overnight saw the currency trade towards 118.36 against the dollar, a fresh two and a half month low. A busy day for economic data particularly for US markets with the release of ADP employment change data for December and November trade data later on today. The dollar continues to strengthen against a basket of major currencies with the dollar index building on Monday’s gains, adding 0.5% against its major peers with gains compounding early on this morning as the greenback finds firm support around yesterday’s close, trading above 99.500 early on.