The Day So Far
The Thanksgiving holiday slumber was interrupted this morning by a big sell off in Chinese equities, the Shanghai Composite collapsing 5.48%, representing the index’s biggest single-day decline since the mid-year correction. This particular move lower was sparked by news the China’s largest brokerage, Citic, had overstated it’s OTC derivatives business by as much as $166bn, damaging the credibility of Chinese capital markets. This fed through to European markets, particularly the commodity-heavy FTSE 100, which underperformed following a note from Goldman Sachs suggesting that the recent rally in base metal prices was ‘at best temporary.’ Equities have steadily recovered since then, with EuroStoxx and the Dax in particular powering to new highs as the expectations of further stimulus from the ECB next week foremost in investors’ minds. These expectations were raised further by Spanish inflation stuck below 0% and the news that French unemployment had risen last month to a new post-financial crisis high, although this was mitigated by Eurozone economic confidence remaining at 4 year highs. The Euro has remained broadly lower versus the dollar, breaking below the 1.06 handle, while sterling has continued to slide, the batch of largely uneventful UK GDP data released this morning not enough to alter the broad theme of US dollar strength.
The Afternoon View
The final session of a very quiet week, US markets are closing early today with most US traders already enjoying their long Thanksgiving holiday weekends. Volume is expected to be light and large moves unlikely. We are looking for a short from the 2094.50 congestion zone, as the S&P is unlikely to break the 2100 handle this afternoon and we feel more confident trading the short side of the tight range we’ve been in all week. We maintain short bias in euro and crude while t notes has crept higher this week on the outbreak of geopolitical risk; we want to go with that trend for now.
Amplify Trading is a Limited company registered in England and Wales. Registered number 6798566. Registered address: 50 Bank Street, 3rd Floor, Canary Wharf, London, E24 5NS. Information or opinions provided by us should not be used for investment advice and do not constitute an offer to sell or solicitation of an offer to buy any securities or financial instruments or any advice or recommendation with respect to such securities or other financial instruments. When making a decision about your investments, you should seek the advice of a professional financial adviser.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.