Global equities rebound strongly as Chinese tensions ease

Thursday, August 27, 2015

There is a strong upside momentum across the global equity markets this morning. Asian equity markets reversed recent heavy losses and rebounded to climb higher overnight. The Hang Seng index rallied over 3.8%, adding nearly 800 points towards 21,900. The Shanghai composite index gained over 5.3% and the CSI 300 rallied nearly 6%. In Japan, the Nikkei index extended gains for a second consecutive session and climbed over 1% towards 18,580.              

European equity markets rebounded strongly this morning, showing signs of strong upside momentum following a week of highly volatile and nervous trading conditions. The DAX, CAC, IBEX and London equity benchmark indices gained between 2.3% and 3% in early trade.

EURUSD slides lower towards 1.13

EURUSD Curncy (EUR-USD X-RATE)   2015-08-27 09-10-03

The euro extended losses and hovered around 1.13 against the USD. We experience a very volatile session in the FX markets as investors remain cautious about the timing of a possible US interest rate rise. Following recent rumours, the recent Chinese slowdown could trigger a possible delay of an interest rate hike, despite the initial thoughts of September. The USD index has recovered from a recent low at 92.60 this week to hover around 95.0 today against a basket of currencies.

USD index hovers around 95.0

DXY Curncy (DOLLAR INDEX SPOT)   2015-08-27 09-11-05

Market participants will be keeping an eye on the release of the US GDP data as well as weekly jobless claims and pending home sales figures for further direction. German import price index was reported at -0.7% m/m in July, missing analysts’ expectations of a 0.3% drop. France’s business confidence rose to 100 in August from 99 in July, beating estimates, and manufacturing confidence increased to 103. The Spanish economy grew by 1% in Q2 2015, in line with expectations.   

 

Events for today:

1330

US

Q2

GDP & Personal consumption

1330

US

w/e

Jobless Claims

1500

US

Jul

Pending Home Sales

1530

US

w/e

EIA Nat Gas

1600

US

Aug

KC Fed

 

All times UK Local Time

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