Market Insights & Analysis

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

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.
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%.
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.
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.
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.
23 Dec 2015 08:33
US economic growth was revised down in the third quarter as the economy accelerated by 2.0% q/q from a previous reading of 2.1% with consumer spending the driving force behind the expansion. The dollar index headed lower for a third straight session yesterday as the greenback gave back practically all of its post FOMC rate decisions gains and tested support towards the 50 day MA.
21 Dec 2015 08:24
It seems the euphoria from last week’s interest rate increase in the US quickly dissipated as stocks on Wall Street faced firm selling pressure on Friday. The majority of market participants polled by Bloomberg and the FT expect the Fed to increase rates by another 25 basis points as early as March next year. The dollar index remains well supported around 98.700 early on this morning after giving back some of Thursday’s gains on Friday. Just when you think it couldn’t get any lower, front month Brent futures have hit a fresh year-to-date low this morning as the global crude benchmark trades towards $36/bbl early on this morning.
17 Dec 2015 08:40
Finally, investors welcomed the long awaited first hike in US interest rates yesterday as the FOMC increased rates by 0.25%, marking the first rate rise since 2006 and putting an end to the historically low rates that have persisted over the past six years. However, after overshooting yesterday we’ve seen demand for the greenback push the dollar index to an open just below 98.650 and target 99.000 early on this morning as investors digested Janet Yellen’s comments. Asian equity markets reacted positively to the US rate rise as the positive sentiment from the US session spilled into overnight trading.
11 Dec 2015 08:24
Iron ore prices slipped to fresh year-to-date lows with the benchmark TSI 62% Fe CFR Tianjin index settling at $37.50/tonne yesterday. The dollar index managed to build on near term support around 97.400 yesterday as the greenback strengthened against a basket of major currencies, trading back above the 50 day MA and targeting 98.000. Investors will be eagerly awaiting the release of the Bank of England’s inflation outlook for the next twelve months, which could offer some hints of when policymakers may start considering an increase in UK rates.
10 Dec 2015 09:20
Front month crude prices failed to halt the bear run yesterday as both Brent and WTI prices slipped for the fourth straight session after a late stage rally failed to take root. The dollar faced further headwinds ahead of next week’s FOMC rate decision as it experienced substantial selling pressure against a basket of major currencies yesterday. UK investors will be eagerly anticipating the Bank of England interest rate decision today and while the consensus expectation is for rates to remain unchanged at 0.5%, market participants will be on the lookout for any phrasing or terminology that could offer any additional insight.
07 Dec 2015 08:22
An eventful week last week as investors were offered plenty of cues from central bankers with the US Fed offering further strong hints that it would look to raise rates at next week’s FOMC meeting. After a bumper week for economic data last week we’ll be getting off to a slow start this week with UK Halifax house prices and Japanese third quarter GDP data the only data points of note to look forward to today.
04 Dec 2015 08:20
Investors were left somewhat underwhelmed by Mario Draghi’s reaffirmed commitment to extend monetary easing until March 2017 “or beyond” with no clearer sign of this than yesterday’s sharp recovery in the euro. While the ECB failed to offer as much support as investors were expecting, the decision to hold monthly bond purchases unchanged could be as a strategic move, saving further stimulus for a rainy day. Janet Yellen continues to prime markets for December interest rate rise as comments during yesterday’s Joint Economic Committee hearing.
03 Dec 2015 08:48
Front month Brent futures slid close to levels last seen during the financial crisis as investors took a bearish stance ahead of tomorrow’s OPEC meeting. Expectations for a Fed interest rate rise this month increased after Janet Yellen gave her strongest hints yet. A very busy session for economic data today, with global PMI data expected throughout the session as well as eurozone retail sales and US employment data.
24 Nov 2015 08:03
Three month LME nickel prices slumped to their lowest level since 2003 as prices extended declines for a sixth straight session. With the last OPEC meeting of the year looming, due to be held on December 4th in Vienna, investors are wondering what the members will make of the year where we have seen crude prices trade around multi-year lows and what the coming year will bring for the group. The dollar index flirted with 100.00 yesterday as intraday moves briefly touched this level before paring back slightly as investors maintained their positioning ahead of an expected US rates rise next month.
23 Nov 2015 08:06
Gold investors were hopeful that last week’s choppy trading potentially signalled that a floor was developing. San Francisco Fed President John Williams proffered strong hints on Friday, stating that there was a “strong case” for the Fed to increase rates in December. The commodity rout continues with industrial metals, oil and gas leading the way lower, largely driven by a stronger dollar and a growing fundamental imbalance. The stronger dollar, which has gained over 3.5% so far this month, and weaker demand outlook has seen the base metals complex take a battering as investors look to limit risk taking.
05 Nov 2015 08:26
US bond yields continued to rise while benchmark stock indices pared recent gains yesterday on the growing expectation that the US Fed would raise interest rates in December. Yesterday’s release of encouraging ADP employment change data for October strengthened the case for an incoming rates rise after 182K jobs were added, two thousand more than the median estimate compiled by Bloomberg. The yen extended declines against the dollar for a fourth straight session during overnight trading, edging towards the 100 day MA as it traded around 121.70.
03 Nov 2015 08:15
US manufacturing data released yesterday offered little in the way of encouragement to investors as the consensus outlook among manufacturers was one of sluggish overseas demand and a lack of domestic restocking. The dollar struggled to regain territory above Friday’s close on Monday as investors weighed up the manufacturing and construction data in the light of a potential interest rate rise this year. The Australian dollar extended gains against the USD for the third straight session after the RBA left the interest rate unchanged at 2.0%, keeping them at a record low for a sixth straight month.
29 Oct 2015 08:30
As expected the US Fed kept interest rates unchanged as the FOMC concluded its two day meeting yesterday, but hints of a December rates rise saw equity benchmarks in the US rally strongly towards the close. The dollar benefited from renewed Fed hawkishness with the dollar index rallying firmly towards 97.800 yesterday after consolidating around below 97.000 the previous day. Spot iron ore prices headed back below $50/tonne yesterday as demand for the steelmaking raw material from Chinese steel mills continued to decline.
28 Oct 2015 08:32
The Japanese yen traded towards a seventh week low against the euro and posted additional gains against the USD as investors repositioned themselves ahead of this Friday’s Bank of Japan monetary policy statement. The Australian dollar dropped unexpectedly against the dollar after inflation data for the third quarter registered a surprise fall to 0.5% q/q compared to the 0.7% q/q expected by market participants. Activity today is anticipated to be relatively mute as investors eagerly anticipate today’s FOMC rates decision.
21 Oct 2015 08:50
Eurozone stocks traded lower for a third day yesterday as investors chose to remain side-lined ahead of tomorrow’s ECB rates decision and subsequent press conference from President Mario Draghi. A growing fear of Chinese bond defaults saw a sharp decline in appetite for mainland Chinese stocks as both the Shanghai Composite and CSI 300 benchmark indices traded between 3.8%-4.3% lower overnight. The dollar index continues to face firm resistance towards 95.00 after recovering swiftly from the recent six week low towards 83.806.
16 Oct 2015 08:42
The dollar index managed to pare recent losses yesterday as the greenback recovered some ground against a basket of major currencies after five day bear run. It has been a tumultuous few quarters for the USD and after rallying robustly throughout the end of 2014 and beginning of 2015 investors were hoping the bull run would continue as a rate rise in the US looked imminent amid a flurry of rosy manufacturing and labour market data. Despite the jittery outlook investors were encouraged back into risk assets after yesterday’s initial weekly jobless claims came in below expectations.
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.
02 Oct 2015 08:40
Asian trading was mixed overnight following a cautious session on Wall Street yesterday as investors assessed the days economic data releases. The Bank of England may have a stronger case for an incoming rates rise as yesterday’s release of the final Markit manufacturing PMI reading for September hold firmly at 51.5 with last month’s reading revised up slightly to 51.6. Spot gold prices extended declines for a fifth straight session yesterday and are on track to extend the bear run for a sixth straight session as investors position themselves ahead of today’s labour market data.
30 Sep 2015 08:45
The Taiwanese dollar attempted to regain some of the territory lost this quarter during overnight trading as it traded back below 32.900 against the US dollar. Despite a pessimistic longer term outlook Asian markets were upbeat overnight as most major stock indices across the region saw higher closes during the last session of the third quarter, however, the modest gains offer little comfort. The dollar index continues to find firm support around the 200 day moving average as investors fleeing emerging market currencies find safety in the greenback.
28 Sep 2015 08:38
After a somewhat disappointing September FOMC meeting as policymakers in the US opted to keep interest rates unchanged despite the hype surrounding the decision among market participants around the world Fed chair Janet Yellen offered additional clarity late last week. The yen continues to find firm support around 120.00 against the dollar as Chinese growth concerns continued to weigh heavily on investor sentiment. The pound sterling faced another under pressure week last week as selling dominated trading activity and dollar strength saw the pound lose over 2.6% throughout the week.
14 Aug 2015 08:14
US data released yesterday continued to point towards an incoming rates rise as initial jobless claims for the week ending August 8th continued to hold near a four decade low. Despite the bullish data US benchmark equity indices ended the session in negative territory as Chinese concerns continued to weigh heavy on investor sentiment.
31 Jul 2015 08:12
Chinese equity markets have had their worst month since 2013 as both the Shanghai Composite and CSI 300 showed no signs of stemming the outflows. The dollar managed to hold onto its gains yesterday despite slightly weaker than expected Q2 GDP data. Investors will be paying particular attention to today’s Bureau of Labor Statistics Employment Cost Index which will offer further insight into how much compensation employers pay out for the same position over time.