Growth worries sustain for markets

Dwelling in the trade uncertainty, Asia markets look to once again find muted movements going into Thursday.

While some positive news on trade were seen across the wires, the contempt as shown through the bond market keeps a lid on optimism.

Currency war unlikely for now

Wall Street picked up a fair bit overnight despite the lack of strong drivers. One would have noted President Donald Trump’s continued criticisms on the Federal Reserve, accusing the central bank of being unable to ‘keep up with the competition’, though that was seen doing little for the market or to put off the climb for the US dollar index.

To some extent, the improvement in risk sentiment had been aided by US treasury secretary Steven Mnuchin’s remarks, both on the fact that the US do not intend to intervene in the currency market and the trade meeting with China will happen. That said, no timing had been specified as we close in on the September 1 tariffs exchange date, keeping this waiting game going. USD/JPY traded moderately higher overnight at around $106 levels below dipping just below the level as we pen this. US indices, the likes of the comprehensive S&P 500 index, is sustaining in the consolidation without so much of a direction at present. As told above, the contempt from the bond market continues to be reflected with the depressed yields for the likes of US 10-year treasuries.

Elevated no-deal Brexit risks

Notably on FX, the focus had been on GBP with the heightened risks of a no-deal Brexit. In what seemed like guerrilla warfare, British Prime Minister Boris Johnson had managed to seek approval of the suspension of parliament with a reopening date close to the October 31 Brexit deadline, cornering the country into leaving the EU and likely without a deal judging by the situation on hand. The likelihood of a hard Brexit at present once again puts the bias on the downside for GBP with prices having fallen to $1.22 levels against the US dollar following the news. This is despite the inverse head and shoulder pattern that should rightly suggest reversal. While fellow lawmakers can be seen voicing dissent, both the potential for further Brexit extension or another no-confidence vote looks to only further complicate the situation and implicate the currency.

Source: IG Charts

Asia open

Against the mixed backdrop above, Asia markets look once again likely to muddle along awaiting fresh leads. Early movers in the region including the likes of the ASX 200 and the Nikkei 225 can both be seen slipping 0.2% awaiting the open for the rest of Asia markets. The rise in greenback strength will be one worth watching in the day that could place further pressure on the Asia region. Japan and the eurozone’s consumer confidence figures will be items to watch in addition to Q2 GDP out of both the US and eurozone for the day in a data filled day.

Yesterday: S&P 500 +0.65%; DJIA +1.00%; DAX -0.25%; FTSE -0.35%


The information 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 Bank S.A. 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 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. See full non-independent research disclaimer.

Seize your opportunity

Deal on the world’s stock indices today.

  • Trade on rising or falling markets
  • Get one-point spreads on the FTSE 100, 1.2 on the Germany 30, and 0.4 on the US 500
  • Unrivalled 24-hour pricing

See opportunity on an index?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on an index?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Get spreads from one point on the FTSE 100, 1.2 on the Germany 30, and 0.4 on the US 500
  • Trade more 24-hour indices than any other provider
  • Analyse and deal seamlessly on smart, fast charts

See opportunity on an index?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.