CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.

Round trip for indices amid directionless volatility

Today’s lack of economic data, coupled with a US bank holiday has created somewhat of a mixed day for traders, where volatility has lacked direction despite tumbling oil prices. 

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
Oil barrels
Source: Bloomberg

Much of today’s trade has been once more intertwined with the path of crude prices, as a morning resurgence gave way to sellers in the afternoon.

The decision to lift sanctions against Iran was certainly no surprise this morning, yet in an environment where traders are looking for any reason to sell crude, the continued downside we are seeing this afternoon fits in with recent trends.

There is no doubt that France is suffering more than most recently, with the nation now dealing with a state of economic emergency according to President Hollande. A €2 billion fiscal plan aimed at stimulating job growth will hopefully chip away at the 10.6% unemployment rate.

Unfortunately, while the likes of Spain, Italy and Portugal have seen their unemployment rates tumble throughout 2015, the French unemployment situation has continued to deteriorate despite the actions of both the government and the European Central Bank.

The on-going deterioration in financial markets is continuing to impact US rate hike expectations, with the Federal Reserve funds futures now indicating that a lone September hike is the most likely event in 2016.

Crumbling stock markets coupled with falling inflation expectations have now created an environment where the Fed will find it very hard to justify any rate increase while these conditions persist.

This information has been prepared by IG, a trading name of IG 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. 

CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.