Global markets come under renewed pressure

Monday, November 16, 2015

Asian and European equity markets remained under pressure and posted renewed losses today as the attacks in Paris, France, on Friday caused high uncertainty across global markets. The tragic events limited any risk appetite and caused nervous trading conditions. In Asia, the Hang Seng index dropped sharply by 1.7% to retest 22,000 while the Nikkei index declined over 200 points (-1.04%) towards 19,380 following disappointing GDP data. Japan’s economy contracted by 0.8% y/y in Q3 2015, following a revised 0.7% drop in Q2 2015, missing analysts’ expectations of a -0.2% decline. The slowdown of the Japanese economy could be part of further weakness in business investment in the country as market participants continue to remain highly cautious due to China’s slowdown.    

European equity markets opened this week in negative territory with the CAC index dragging lower by 0.70% in early trading while the DAX, IBEX and London equity benchmark indices tracked the downtrend and fell between 0.35% and 0.95%. The euro held above the recent level of 1.0700 against the USD on Friday, while this morning the European currency came under renewed pressure breaking below 1.0700, towards 10.650.

EURUSD comes under renewed pressure and breaks below 1.0700

EURUSD Curncy (EUR-USD X-RATE)   2015-11-16 09-03-28

In the UK, Rightmove house prices dropped by 1.3% in November compared to a 0.6% rise in October. Sterling came under renewed pressure this morning and slid lower below 1.5200 against the US dollar. However, sterling holds fairly strongly against the euro after hovering around 1.4150.

Precious metals rebounded and climbed higher this morning, acting as safe haven due to increasing uncertainty across global equity and commodity markets. Gold rallied towards $1100/ounce while silver recovered towards $14.50. Platinum and palladium also posted solid gains in early trade this morning. On the other hand, base metal prices remained under pressure as a slowdown of metal’s demand from China, bearish fundamentals and a strong USD weigh on market sentiment. Copper extended declines below $4,800 while aluminium dropped over 1.0% in early trade, eyeing the $1,450 area.  

 

Events for today:

0930

UK

Nov

Rightmove House prices

1000

EC

Oct

CPI

1330

US

Nov

NY Fed Manufacturing

 

All times UK Local Time

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