LCG Research team
London Capital Group
A slightly weaker finish on Wall Street and contagion risk spreading out of Turkey is setting the tone for European shares. The ECB has warned that some European banks could be harmed from the economic fallout in Turkey. Shares of banks with the most loan book exposure to Turkey are expected to come under the most pressure.
More generally, traders await the next move from the White House in the US-China trade war. A rally in Amazon shares pushed the Nasdaq up close to a new record but uncertainty around Tesla and its plans for going private were a drag. The strong showing in tech and US small caps demonstrates an isolated strength in the US markets that is not evident more globally.
UK GDP data out today could provide some respite for Sterling, if it can come ahead of the low expectations of 1.3% y/y growth. GBPUSD hit fresh lows at 1.28 overnight as Brexit concerns and a dovish outlook from the BOE continue to plague the currency.
Later on there is inflation data from the US, which is expected to hold at a solid 2.3% y/y. The release could provide some movement in the short-term but in the context of 4% US GDP growth, it seems likely the rise in the dollar will be unperturbed.
This information has been prepared by London Capital Group Ltd (LCG). 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. LCG 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. Spread betting and CFD trading carry a high level of risk to your capital and can result in losses that exceed your initial deposit. They may not be suitable for everyone, so please ensure that you fully understand the risks involved.
Recommended Content
Editors’ Picks
EUR/USD hovers around 1.0700 after German IFO data
EUR/USD stays in a consolidation phase at around 1.0700 in the European session on Wednesday. Upbeat IFO sentiment data from Germany helps the Euro hold its ground as market focus shifts to US Durable Goods Orders data.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold price flat lines above $2,300 mark, looks to US macro data for fresh impetus
Gold price (XAU/USD) struggles to capitalize on the previous day's bounce from over a two-week low – levels just below the $2,300 mark – and oscillates in a narrow range heading into the European session on Wednesday.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.