Market Insights & Analysis

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

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.
05 Jan 2016 08:33
A semblance of calm returned to Asian equity markets overnight after a bearish start to the week which saw the negative sentiment spill over to the European and US sessions. Despite the Chinese central bank’s best efforts to instil renewed confidence in global markets gold is on track to close higher for a second straight session as risk averse investors increase holdings of the safe haven asset. The Aussie dollar and Canadian dollar managed to regain some of yesterday’s losses against the US dollar after the PBOC intervention as investors welcomed the support.
14 Dec 2015 08:37
Asian equity markets posted a mixed start to the week as Chinese investors reacted positively to the PBOC's decision to weaken the yuan further. Another quiet start to the week with Tankan large manufacturing survey and outlook data hinting towards a cautious outlook for the fourth quarter. We expect the week ahead to be dominated by choppy trading as investors gear themselves up for this Wednesday’s FOMC interest rate decision.
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.
08 Dec 2015 08:20
Chinese trade data released overnight painted a bleak outlook for the world’s second largest economy, prompting another run on Asian stocks with the miners in London under renewed pressure. Mainland Chinese stocks led the charge lower overnight with both the CSI 300 and Shanghai Composite losing between 1.7%-1.9%. Front month Brent futures sank to their lowest level since the financial crisis as the price per barrel hit $40.60 on selling that dominated the entire day.
13 Oct 2015 08:29
Chinese trade data released overnight was cause for further investor unease as signs of slowing growth saw Asian equity markets trade under pressure. It’s been a turbulent H2 2015 so far for the Chinese economy as policymakers in Beijing pull out all the stops in an effort to reverse the steady decline in almost all major indicators and trading conditions aren’t expected to ease during the final quarter of the year. As if to prolong the uncertainty surrounding the path US interest rates will take when the Fed do eventually decide to raise them, a senior Fed policymaker has voiced her concerns regarding a rates rise that comes too soon.
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.
13 Aug 2015 08:13
Asian stocks saw some semblance of calm overnight as major benchmark indices across the region pushed into positive territory. We could see an increase of dynamic intervention by the PBOC as it seeks to clarify how its sets the reference rate, now taking into account the previous day’s close as well as current supply and demand when it sets the fixings for the coming session. An explosion at a northern Chinese port has left 44 dead and hundreds injured according to early reports. Spot gold prices posted gains for a fifth straight day yesterday as the yellow metal found firm support around the previous sessions close and pushed higher towards $1,125/oz.
12 Aug 2015 08:07
The base metals complex saw intense selling pressure overnight as prices revisited levels last seen during the financial crisis. The yuan declined against the dollar for a second day, losing 1.94% from the previous close against the greenback as the government’s latest efforts to shore up markets struggled to have the desired impact. OPEC output hit a three year high in July sending front month Brent futures back below $50/bbl as the supply glut continued to build.
11 Aug 2015 08:20
Another surprise move by Chinese policymakers caught investors off guard early this morning as the PBOC took steps to weaken the renminbi in an effort to shore up capital markets. Russia’s economy contracted 4.6% y/y during the second quarter of the year building on the 2.2% decline seen in the first quarter as weak crude oil prices significantly impaired economic growth, dragging the country into recession. Greece has agreed bailout terms with its lenders early this morning after talks continued throughout the night.
09 Mar 2015 08:07
Asian equity benchmark indices started the week on the back foot with most major markets erasing much of the previous session’s gains as investors continued to mull over Friday’s US jobs data. The surprise increase in Friday’s nonfarm payrolls, which rose by 295K in February against expectations of a lower 235K increase, prompted investors to speculate that a US rates rise was on its way. The US dollar index rallied to a fresh 12-year high on Friday, gaining 1.26% against a basket of major currencies as it touched levels towards 97.726.
27 Feb 2015 08:04
The dollar index posted significant gains yesterday rallying 1.14% as significant gains were made against most major peers as core inflation registered a bigger increase than expected. Most major equity indices in Asia ended the week on a positive note, encouraged by the better than expected US core inflation data released yesterday. Front month Brent futures held above $60/bbl yesterday as fresh supply outages in the North Sea and gas supply concerns in Europe supported the global benchmark above this psychological level of support.
05 Feb 2015 08:02
The PBOC cut the reserve requirement ratio for the first time since May 2012 in a bid to free up more capital and boost lending to the private sector. The ECB tightened Greece’s access to cheap liquidity, presenting a firmer opposition to the newly elected anti-austerity government than many market participants had previously expected. Continued uncertainty surrounding a potential Grexit saw gold prices rally almost $10 higher yesterday with the SPDR Gold Trust ETF seeing positive flows on safe haven demand.
04 Feb 2015 08:37
The ECB has proven unwilling to approve the new rescue plan put together by the Greek government with the central bank reluctant to raise the €15bn t-bill insurance to the €25bn threshold requested by Athens. China’s services sector expanded at the slowest pace in six months as January’s HSBC services PMI reading slipped to 51.8 from 53.4 the previous month.
27 Jan 2015 07:53
Futures prices across the base metals complex were trading lower early on this morning after National Bureau of Statistics data released overnight showed industrial profits grew at their slowest pace on record in December, extending the previous month’s declines. In an effort to combat the sluggish outlook the PBOC took steps to inject funds into the market by instigating 60bn yuan of reverse repos for seven day and 28 day contracts. The yen gained ground against the dollar during overnight trading, strengthening towards 118.00 as the currency recovered the majority of yesterday’s losses
16 Sep 2014 08:13
Weaker than expected FDI exacerbated concerns regarding slower Chinese growth after figures released overnight showed foreign direct investment slipped to a four year low. The dollar traded around a six year high against the yen in the lead up to the September FOMC meeting starting today. Three month LME aluminium prices stabilised around $2,000/tonne in early morning trade.
24 Jul 2014 08:07
Stronger earnings in the US lifted the S&P 500 to a new all-time high yesterday as investor confidence improved. Chinese stocks gained further ground overnight after the release of better than expected PMI data, providing further support to Beijing’s current policy outlook. Spot gold prices fell further overnight, on track to post a third straight session of losses after breaching the 100 day MA just below $1,302/oz.
21 Mar 2014 08:58
US stocks headed higher yesterday, paring Wednesday’s losses as investors were encouraged by economic data. Chinese stocks posted significant gains on the hopes that the government would shore up support and loosen funding restrictions for property developers and banks. Front month Arabica coffee futures extended declines yesterday, losing 5.4% as prices closed at a four week low after rains in Brazil helped ease drought woes that saw prices rally 86% since the start of the year.
18 Mar 2014 07:54
After the weekend’s referendum in Crimea markets seem to be less uncertain as the relief rally on Wall Street yesterday saw both the DJIA and S&P 500 post steady gains of 1.13% and 0.96% respectively. Investors will also be paying close attention to this week’s FOMC meeting which will be Janet Yellen’s first monetary policy meeting as chair. Asian equity indices followed US markets higher during overnight trading as risk appetite slowly returned. Renminbi traded towards 11-month low this morning after dropping 0.45% against the dollar yesterday as the PBOC reinforced its intention to allow market forces to play a greater role.
17 Mar 2014 08:24
Overnight trading in Asian equity markets set the week off to a shaky start as Japanese benchmark indices slipped lower, remaining under pressure on Ukrainian tensions while Chinese indices managed to rally higher after Friday’s sell-off. Tensions between Ukraine and Russia are dominating headlines and with all eyes on the referendum over the weekend, investors retreated from risk assets on the uncertainty towards the end of last week. Spot gold prices pushed above $1,390/oz for the first time since early September as the vote in Crimea boosted haven demand.
10 Mar 2014 08:20
Asian equity markets started the week on the back foot as weaker than expected Chinese and Japanese data dampened investor sentiment. Japanese data compounded the bearish undertones in Asian markets as fourth quarter annualised GDP growth trailed its estimate, coming in at 0.7% q/q against the 0.9% q/q expectation. European markets have followed Asian indices lower on the open and as investors grow wary of rapidly rising valuations in recent months we may see a market correction on long term profit taking.
07 Mar 2014 08:06
US stocks managed to push higher on better than expected jobless claims as the hopes of steady progress between Russia and the Ukraine allowed investors to focus attention back towards economic data. Asian markets were mixed overnight with Japanese equity indices spurred higher by gains on Wall Street while Chinese stocks struggled to hold on to the previous session’s gains. Reinforced commitments from the BOE and ECB to shoring up economic conditions will boost investor confidence; however, falling prices remain a concern for policy makers which will require close monitoring.
28 Feb 2014 08:00
The S&P 500 closed at a record high yesterday, adding 0.49% throughout the session after sanguine comments made by Janet Yellen in her testimony before the Senate Banking Committee lifted markets, citing harsh weather conditions for the recent disappointing data. The yuan weakened for the 9th straight session yesterday and at one point reached 6.1760 against the dollar as speculation that the increased volatility in recent sessions was a result of the central bank widening the trading band. Raw sugar futures extended gains yesterday closing above 18.00 cents for the first time since early November after a brief pause saw prices struggling to breakout above 17.75 cents earlier this week.
25 Feb 2014 08:03
US stocks pushed higher yesterday as the S&P 500 pushed to a record intraday high at 1,858.71 before ending the day 0.62% higher at 1,847.61. Japanese equity indices were encouraged higher by the improving sentiment on Wall Street, as the Nikkei and TOPIX closed 1.44% and 1.2% higher respectively. Arabica coffee futures continued to extend gains yesterday after pausing around 170 towards the end of last week as drought in Brazil supported second month coffee contracts above $1.75/lb for the first time since October 2012.
10 Dec 2013 08:29
US equity markets extended the previous week’s gains with the S&P 500 closing at a record high, adding 0.18% throughout the day as investors continue to weigh positive economic data against the timing of tapering. Asian equities struggled with directions during overnight trading despite US investor bullishness as the lack of fresh economic releases from the US kept investors side-lined. The RICS house price index has risen to its highest level in over ten years as government schemes to boost buying coupled with supply shortages support higher prices. The Chinese yuan has pushed to a two decade high, approaching 6.0700 signalling policy makers are loosening their control on the currency with the hopes that it could ultimately lead to a free-floating exchange rate.