In mid-morning trading, the FTSE 100 is 30 points lower, as indices edge lower following the late rally last week.
- Equities drift down following trade talk rally
- Outlook still strong for Q4 gains
- Hopes of Brexit deal dim
Some of Friday's trade war and Brexit euphoria has worn off, particularly for equities, but overall indices find themselves in much stronger form than they did a week ago. Even if this is only a partial trade deal, with plenty of issues left to solve, the mere fact that the US and China were able to get together to hammer out agreement on some issues provides hope that this pernicious issue could be resolved eventually. The situation for equity markets in Europe and the US is remarkably similar – having rallied hard over the previous two sessions, markets find themselves either at or near to previous highs for the year. Something is now needed to drive them onwards from here, and trade progress would be just the kind of catalyst that would allow indices in Europe and the US to take advantage of positive seasonality and drive higher from here.
The drop from Friday's high for sterling against the dollar and the euro might also provide a buying opportunity for those brave enough to expect further progress towards a UK-EU deal. There was little progress over the weekend to back up the promising talk of last week, and hopes of a deal may well founder on the rocks of detail like backstops and customs deals.
Ahead of the open, we expect the Dow to start at 26,813, down 3 points on Friday's close.
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
AUD/USD keeps losses below 0.6550 ahead of RBA Bullock's presser
AUD/USD is keeping losses below 0.6550 in Asian trading on Tuesday. The Aussie Dollar remains offered after the Reserve Bank of Australia extended the pause while markets digest the less hawkish policy statement ahead of Governor Bullock's press conference.
USD/JPY holds gains below 150.00 on the expected BoJ rate hike
USD/JPY holds gains below 150.00, as the Japanese Yen stays vulnerable amid a classic 'sell the fact' trading on the hawkish BoJ decision. The BoJ lifted the interest rate by 10 basis points (bps) from -0.1% to 0% for the first time since 2007 and abandoned the YCC framework.
Gold price flat-lines above one-week low, awaits the crucial Fed decision on Wednesday
Gold price oscillates in a range and is influenced by a combination of diverging forces. Hawkish Fed expectations, elevated US bond yields and a bullish USD cap the upside. Geopolitical risks lend some support to the XAU/USD ahead of the key FOMC meeting.
Bitcoin price shows weakness, but new BTC whales have created solid support at $56,400
Bitcoin price downside momentum continues to gain strength, giving sidelined and late bulls a chance to buy the dip. The market remains focussed on the oncoming halving, expected to kick off the next bull cycle. For the meantime, however, spot BTC ETFs remain the main play in the market.
Lots of tension ahead of this week's Fed decision
Last week, we got a strong round of US economic data accompanied by hotter US inflation reads. The takeaway of course is that there might be a lot more pressure on the Fed to be looking to scale back its rate cut outlook at this week’s meeting.