A sombre start

16 November, 2015

The events of Friday evening in Paris have cast a sombre tone to European markets, evident in the weaker tone to stocks carried over from the Asia session, with stocks opening around once percent lower. Also causing a more cautious tone in Asia was the weaker GDP data seen in Japan confirming a return to recession in the third quarter. The economy has contracted 0.2% in the previous two quarters, although some modest comfort can be taken from the fact that private consumption recovered in the third quarter after the Q2 weakness. Much of the weakness came from the fall in business investment. The yen initially weakened (USDJPY above the 122.50 level), with the follow through seen during the European session coming on the back of the stronger dollar emerging on the majors. Further quantitative easing from the Bank of Japan looks possible at some point, but some further fiscal stimulus looks more likely in the coming months.

For today, we just have final CPI data for the Eurozone at 10:00 GMT with US Empire Manufacturing later in the day. Note that ECB President Draghi is due to speak at 10:15 GMT in Madrid, with ECB Board member Coeure due to speak in Paris this afternoon. It’s likely that we are going to see the more cautious tone continue for the early part of the week which will favour the dollar and more so against the yen. On the crosses, EURJPY is most likely where the strongest fight will play out, with more dovish rhetoric from the ECB having scope to push it back towards the 130 level, last seen late April.


Source link  
Market shows demand for yielding assets

The market shows demand for yielding assets, which in turn supports demand for the stocks and currencies of emerging markets. The main...

Yuan and Dollar as a weapon in trade wars

The US Nonfarm Payrolls on Friday could even be called boring: the report showed the preservation of a completely healthy labour market...

Disappointment with Fed and tariffs

Trump announced 10% tariffs on Chinese goods worth $300 billion since September 1, thus ending the US-China trade truce after disappointingly...


Fed pushes down stocks

Markets have started the week under pressure. Expectations that the Federal Reserve will cut interest rates by 50 points in July collapsed...

Gold updates new 6-years highs

Gold benefits from a combination of two factors: lower interest rates in debt markets and continuing hopes that the global economy...

Markets recede from the recent highs

A strong Nonfarm Payrolls caused pressure on the stock markets, reducing the chances of the interest rates lowering by the Fed in the upcoming months...


Gold resumes rally, pushing past $1400

Gold prices resumed a push higher on Monday, as flows into the precious metal continued on improved prospects for easier monetary policy from...

Gold rises as markets slip

Market caution continues to support gold. Quotes of this metal rose to $1337, repeatedly trying to push above this year highs at the 1340-1360 area...

Trump says Brexit should happen

President Donald Trump promised the U.K. a "phenomenal trade deal" Tuesday, on the second day of his state visit to Britain...

  


Share it on:   or