Market Brief: Risk ON as Middle East fears recede further
Fawad Razaqzada January 9, 2020 7:08 AM
A summary of news and snapshot of moves ahead of the US session.
- Market update at 11:50 GMT: In FX, EUR and USD were among the biggest risers, while GBP brought up the rear; stocks rallied and commodities fell across the board.
View our guide on how to interpret the FX Dashboard
- GBP fell sharply this morning after the Bank of England’s Mark Carney delivered a dovish speech. The outgoing Governor said persistent weakness could require prompt response and that there is headroom equivalent of 250 bps of policy space. Meanwhile, UK Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen met yesterday and set out some red lines for the negotiations set to take place this year. Leyen warned that getting a full and comprehensive exit deal by the end of 2020 is “impossible,” and an extension is therefore required – something Johnson has previously ruled out.
- EUR rose as German industrial output increased by 1.1% m/m in November, its biggest rise in a year and a half. However, declining exports made for mixed signals on Europe's largest economy.
- Risk ON: Following Donald Trump’s speech on Wednesday, crude oil and gold both fell after the US President made no mention of military action against Iran and called for peace and negotiations. While these commodities fell, the more risk-sensitive copper rallied along with stocks. Equities have extended, with the German DAX hitting a new high above last year’s peak and US index futures suggest the S&P 500 will hit a new record high. In addition to the easing of Middle East tensions, sentiment is boosted by news China's Vice Premier Liu He will sign the "Phase 1" deal in Washington next week, according to the commerce ministry.
- UK company news:
- Tesco (TSCO) shares fell more than 1% after Britain's biggest retailer managed only a 0.1% rise in underlying UK sales over Christmas, disappointing expectations.
- Marks & Spencer (MKS) saw its shares fall 9% as weak menswear and gift sale caused same-store sales in the clothing and home business to fall 1.7%.Although this was an improvement from last year, it was nonetheless worse than the 0.8% decline expected.
- Coming up:
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.