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.
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.
02 Feb 2016 08:35
Jittery investors saw mixed trading during the Asian trading session as continued support by the PBOC saw mainland Chinese equity benchmarks rise against a backdrop of weaker stocks across the region. In a further sign of the cautious outlook adopted by many investors spot gold prices extended gains yesterday, rallying towards $1,130/oz yesterday on a combination of investment and physical demand. Front month Brent futures snapped a four day rally yesterday after briefly trading towards a four week high as investors took an opportunity to bank profits.
25 Jan 2016 08:43
Front month crude oil futures ended the week on a high note as Brent contracts for March delivery rallied back above $30/bbl, ending the session 8.6% higher. Persistent global growth concerns have shored up investment support for gold as the previous metal rebounds back above $1,100/bbl at the start of this week. The steel market in China was offered some encouragement after Premier Li Keqiang promised additional cuts to capacity as efforts to restructure the world’s biggest steel industry continue.
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.
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.
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.
22 Dec 2015 08:07
Prospects of additional stimulus in China saw currencies across the region rise with off-shore yuan strengthening for the third straight day. The PBOC offered up additional support to the Chinese currency, strengthening the daily fixing for the yuan on Monday and bringing an end to the recent streak of weakness which has seen onshore renminbi lose 1.5% against the dollar over the past two and a half weeks. Front month Brent futures are holding around their eleven year lows this morning as negative investor sentiment for the year ahead saw appetite for the global benchmark drop.
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.
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.
02 Nov 2015 08:36
Crunch time for the Bank of England is fast approaching as policymakers meet this Thursday for the penultimate MPC meeting of the year. The Turkish lira experienced considerable strength against the USD during early trade on Monday morning after a surprise win for the AK party. China’s manufacturing PMI reading for October released over the weekend offered little encouragement for investors who had hoped that activity in the world’s second largest economy had finally bottomed out and reached a floor.
26 Oct 2015 08:36
Chinese stocks closed higher for a third straight session, rising to a two month high, as investors welcomed Friday’s decision by the PBOC to cut interest rates as policymakers continued to wrestle with a slowing economy. Japanese investors were upbeat following the PBOC’s decision to push for more monetary easing as speculation that the Bank of Japan would also increase stimulus measures saw both the Nikkei 225 and TOPIX indices post steady gains, adding between 0.655-0.75% overnight.
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.
15 Jul 2015 15:14
The release of Chinese Q2 GDP data, which saw growth hold firm at 7.0% y/y for a second straight quarter, failed to provide mainland equity markets with adequate support. Instead both the Shanghai Composite and CSI 300 extended declines for a second day, losing 3% and 3.5% respectively. Investors were right to approach equity markets with renewed caution as recent efforts to stimulate the Chinese economy and reverse mounting deflationary pressures saw a significant spike in volatility.
30 Apr 2015 08:39
The US Fed moved to dampen expectations of an imminent rates rise as the recent string of weaker than expected economic data showed that growth was gradually losing momentum. Chinese interest rate swaps headed for their biggest decline since 2008 this month as the PBOC ramped up its stimulus efforts in a bid to support the economy. The Bank of Japan held off from additional stimulus this month opting to hold the expansion of the monetary base at 80tn yen this year despite the abating pressure of rising inflation. Brazil’s central bank increased its benchmark interest rate by half a percent bringing a fifth consecutive increase to the key rate.
27 Apr 2015 08:04
The euro continued to strengthen against the dollar this morning after posting gains towards the end of last week as signs that the euro is back on the way up encouraged market participants back into the single currency. Interest rate swaps in China dropped to a multi-year low as a growing number of market participants anticipated the central bank to introduce additional measures in an effort to help support the economy. Asian benchmark indices extended gains, starting the week on a strong footing, tracking the gains on Wall Street after Friday’s bullish US data pushed US equity indices higher.
22 Apr 2015 08:20
Another strong session for Asian markets overnight with Japanese benchmark indices pushing to a fresh fifteen year high. Chinese investors were seemingly unfazed by the first default of a SOE as mainland Chinese stocks rallied to a new year-to-date high, indicative of the renewed optimism shared by market participants in the wake of fresh central bank stimulus. The dollar index gained for a second straight session yesterday as it made steady progress recovering some of the previous week’s steep losses.
21 Apr 2015 08:05
Three month LME copper prices shed almost 3% yesterday after a positive start to the week saw the red metal open at a four week high at $6,173/tonne. Asian indices headed higher overnight as they tracked a stronger session on Wall Street and continued to mull over the impact of further stimulus measures by the PBOC. The dollar index headed higher early this morning as the greenback built on support offered at yesterday’s close.
20 Apr 2015 08:14
The People’s Bank of China moved to increase stimulus as details of additional easing measures were released over the weekend. Mainland Chinese equity indices led the slide lower as the majority of Asian benchmarks erased some of the recent gains after investors viewed the recent rally as overdone. Industrial metals lifted higher after the PBOC move with three month LME lead prices rallying to their highest level year-to-date early on this morning, trading back above $2,050/tonne.
16 Apr 2015 07:49
Tensions between Germany and Greece showed no signs of curtailing after recent comments from Germany’s finance minister, Wolfgang Schäuble, all but ruled out any deal in the coming week. Asian equity indices rallied higher overnight as the bullish sentiment from both the European and US session’s spilled over to Asian trading. Comments from Premier Li Keqiang offered markets further insight into the tools at policymaker’s disposal as they battle to support growth.
15 Apr 2015 13:13
After yesterday’s shaky session for European equity markets today’s session saw stocks push to a fresh fourteen year high with the majority of the gains added in the morning, ahead of the ECB’s rate decision. Equity markets started the week on a positive footing after unimpressive Chinese trade data released on Monday and softer than expected industrial production data released overnight increased the prospects that Beijing would also soon step up its monetary easing efforts in a bid to support a faltering economy.
08 Apr 2015 08:02
The IMF has warned of a prolonged period of lower growth, reigniting fears that the world economy will face considerable headwinds over the coming years which would present significant obstacles to governments and policymakers. Figures published yesterday by the ECB covering the first month of its QE programme indicated eurozone central bankers purchased government bonds to the tune of €52.5bn. Asian stock indices rallied higher overnight, building on the previous session’s gains with the Hang Seng leading the pack, surging over 2.5% higher overnight.
01 Apr 2015 15:28
European stocks got off to a strong start to the first session of Q2 as economic data released earlier today indicated that the recovery in the eurozone is well on track, dispelling concerns that have kept the pressure on risk assets in recent sessions. It’s been a tough first quarter for commodities as global demand growth struggled to lift off and ample supplies skewed the fundamental balance. Seaborne iron ore has been particularly hard hit by off balance fundamentals, exacerbated by a stronger dollar, with the TSI 62% Fe CFT Tianjin benchmark price leading the worst performers for the quarter as it ended Q1 at $51/tonne, down almost 28% since the start of the year.