Market Insights & Analysis

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

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.
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.
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.
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.
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.
09 Dec 2015 08:48
Some slightly better data coming out of China overnight as we start to see the emerging impact of stimulus measures. The yuan failed to halt its recent bearish run against the USD as investors focused on weaker factory gate prices and continued to digest yesterday’s weaker than expected trade data. Both front month Brent and WTI futures seem to have stemmed the recent outflows as they find support around yesterday’s opening levels.
01 Dec 2015 08:02
Chinese equity markets pushed tentatively higher overnight as encouraging economic news and data supported risk appetite across the region. The inclusion indicates just how extensive the reforms have been in China with offshore spot yuan trading 0.3% weaker against the USD as market participants anticipated that the PBOC would hold off from further stimulus, allowing a freer movement of the currency. After finally managing to close above 100.00 on Friday, the dollar index held firmly onto recent gains on Monday, trading tentatively higher towards 100.310 as investors geared up for this week’s economic data releases ahead of the FOMC meeting later this month.
17 Aug 2015 08:13
The yuan started the week off on a firm footing as overnight trade offered early signs that intervention from the PBOC was starting to take effect. Yields on ten year German bunds dropped at the beginning of the previous week as concerns regarding China’s currency devaluation saw traders doubt the timeline for an eventual US rates rise, opting instead to return to safe haven assets. Spot gold prices trimmed some of their heady gains towards the end of last week, snapping the five day rally that had seen prices for the yellow metal recover from just under $1,084/oz during the first week of the month towards $1,125.58/oz last week.