An absence of outwardly negative macro news has enabled equity markets to replace pessimism with a touch of optimism.
Fears over the Chinese equity markets have for the time being eased, as the Shenzhen once again staged a minor recovery in overnight trading. Although a quick glance at the history books proves that stories involving central banks trying to bend the will of the free markets to their own don’t end well. European equity markets appear to have collectively decided enough is enough, and yesterday’s resilience is being added to after a re-emergence of the buy-on-dip brigade.
Traders don’t know where to look as they are being flooded with both quarterly releases and trading updates from numerous big name corporates. Fears that an absence of a CEO would leave Barclays rudderless have quickly been quashed, as chairman and now acting CEO John McFarlane has overseen expectation-beating pre-tax profits regardless of the fresh tranche of £850 million that the firm has had to set aside due to historical PPI misdemeanours. Another firm embarking on cost-cutting measures or ‘significant’ staff reductions is Tullow Oil. The African-based oil producer, which has been crippled by the low spot prices, has seen the last five years’ worth of share price increases wiped out.
Regardless of the comments that interest rate rises could materialise at the turn of the year, Taylor Wimpey has once again been able to post impressive first-half profits, up by a whopping 33.4%. This highlights that even the end of the six-year run of historically low interest rates isn’t denting the UK housebuilder’s momentum.
Today’s FOMC statement might not be out until 7pm (London time), well after the European markets close, but it will not be too long before the markets freeze up in anticipation of Janet Yellen’s latest thinking surrounding interest rate rises.
After last night’s disastrous figures, Twitter would be well advised to sit back and take notes on how you monetise a sizeable social media user base, as Facebook posts its second-quarter figures after the bell tonight.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
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.