Indices surge to new highs again

Chris Beauchamp IG

It has been another good week for equities, with new highs in the US and UK, says Chris Beauchamp, Chief Market Analyst at investing and trading platform IG.

Softer inflation powers new market rally

Any worries about today’s US inflation figures have been dispensed with following a softer set of figures. This clears the way for next week’s Fed meeting to cut rates, not that that was ever really in doubt anyway. The afternoon has seen the Dow, S&P 500 and Nasdaq roar to new records, joined by the FTSE 100 which continues to bask in better UK economic data and corporate news. The week has seen further declines in volatility, as trade war fears ease. Now attention shifts to the Trump-Xi meeting, perhaps the one event that really has the power to provide a surprise.

Oil recovery continues

Oil prices seem poised to enjoy their best week in months, spurred by signs of higher US demand and the new sanctions on Russia. But any sustained strength in the commodity could risk a fresh round of output increases from OPEC+, keen to maintain dominance and (in Saudi Arabia’s case) maintain the friendship of the US and its mercurial leader. Oil bears have been trounced this week, but it feels like a temporary setback.

Author

Chris Beauchamp

Chris Beauchamp has been with IG for four years, and in that time has become a regular commentator and analyst for the financial press and TV, with appearances on all the major financial channels as well as the BBC and Sky News.

GBP/USD surrenders some gains, back to 1.3420

GBP/USD holds on to moderate gains above 1.3400 the figure on Friday. Optimism surrounding the UK government’s leadership transition and expectations of further BoE tightening support the British Pound, while easing tensions in the Middle East and fading Fed rate-hike expectations weigh on the US Dollar.

EUR/USD turns positive, targets 1.1450

EUR/USD now picks up pace and advances toward the 1.1440 region on Friday, up modestly for the day. With no major economic data due, lingering uncertainty over the US-Iran conflict keeps investors cautious, limiting the pair's upside.

Gold remains offered, still below $4,100

Gold struggles to extend Thursday’s rebound and navigates below the $4,100 mark per troy ounce on Friday. Uncertainty surrounding the Middle East conflict limits the precious metal’s upside, which is also under pressure amid rising US Treasury yields across the curve.

Week ahead – US CPI and Warsh testimony to take centre stage, BoC eyed too

US inflation report and Warsh testimony to headline the week. Dollar to dominate amid slew of other US data and Mideast tensions. Amid fresh Iran escalation, China GDP to shed light on Q2 impact. Bank of Canada not expected to follow RBNZ with rate hike.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June Federal Open Market Committee meeting landed mid-round-trip, describing a world that had already stopped existing.

Five sessions, one round trip: Why the whipsaw is exactly what Warsh ordered

Markets opened July with a December hike as the base case and spent five trading sessions unlearning and relearning it. A 57K payrolls print bled the tightening bets out of the strip; a re-shut Strait of Hormuz is pushing them back in. Wednesday's minutes from the June FOMC meeting landed mid-round-trip, describing a world that had already stopped existing.