CFDs are complex instruments. 74% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money. CFDs are complex instruments. 74% of retail client accounts lose money when trading CFDs, with this investment provider. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

Early Morning Call: equity markets hesitant after strong selloff

Equity markets trading with caution this morning after a strong selloff yesterday. EUR/USD meanwhile sets a new 20-year low while Zoom cuts profit and revenue guidance.

EUR/USD parity

Asia-Pacific equity markets fell overnight, after US indices lost ground in yesterday’s session as EUR/USD set a new two decade low, by falling below parity and further than it did mid-July.

Most economists who have taken part to the latest Reuters poll on Federal Reserve (Fed) rates expect a half percentage point hike next month, confirming the previous poll, which would take the key interest rate to 2.75%-3.00%. Eighteen of the 94 surveyed see the Fed going for 75-basis points (bps). According to the survey, many think inflation has peaked, while risks of a recession are growing.

Since March, the US Federal Reserve has raised rates by a total of 225 basis points, and with more to come, the survey showed a 45% median probability of a recession over the coming year, up from July's 40%, and a 50% chance of one within two years.

Macroeconomic outlook

Markets await PMI manufacturing data in Europe and the US, expected to fall further across the board.

Germany and France PMI are already in contraction territory, while the UK manufacturing and services PMI should remain above 50. Later this afternoon, Eurozone consumer confidence flash for the month of August is forecast to fall to -28, from -27 the previous month.

In the US, July new home sales are expected to drop by 3% on a month-on-month (MoM) basis.


In the UK, John Wood Group PLC says its adjusted EBITDA fell by 5% in the first six months, and revenue was flat. It nonetheless expects higher revenue his year, between $5.2 billion and $5.5bn.

Meanwhile, Britain will not take any action over billionaire Patrick Drahi's stake in BT Group PLC, according to a statement from the British telecom firm this morning.

Last December, Drahi increased his stake in BT to 18%, a move that had to be examined by the British Government to see whether it would have national security implications.

Elsewhere, Zoom Video Communications Inc fell by more than 10% in extended trading, after the group cut its annual profit and revenue forecasts. Zoom posted earnings of $1.05 per share, better than the 94 cents anticipated by analysts, but revenue missed forecasts, rising only by 8% to $1.1bn, its slowest quarterly revenue growth on record.

At the peak of the pandemic, Zoom was posting triple-digit growth. Now that workers are going back to the office, the group has to find ways to attract high-paying clients to sustain its growth, in a high inflation environment.

Zoom had to cut its earnings and revenue forecast. It now expects annual adjusted profit per share between $3.66 and $3.69, compared with $3.70 to $3.77 forecast earlier. Annual revenue is now seen between $4.39 billion and $4.40 billion, compared with Zoom's earlier outlook of $4.53 billion to $4.55 billion.

More US earnings are due today. Toll Brothers Inc is scheduled to publish its quarterly earnings before the opening bell. Analysts anticipate earnings of $2.30 per share, on revenue of $2.52bn.

Urban Outfitters Inc’ report is also expected before market opens. Earnings per share (EPS) should come at 69 cents, and revenue at $1.18nn.


Yesterday, sources from OPEC+ said the organisation produced 2.9 million barrels fewer than its target set for July. OPEC+ agreed to increase output by 648,000 barrels per day (bpd) in each of July and August, in the process to fully unwind nearly 10 million bpd of cuts implemented in May 2020.

Earlier this month, the group agreed to further increase production targets by another 100,000 bpd for the month of September. Oil prices weren't really affected by the announcement as missing target is far from uncommon for the organisation.

Despite tight physical crude supply, oil prices have recently been driven by macroeconomic fears, prompting Saudi Arabia's energy minister to warn that the organisation was ready to cut output to address the recent drop in oil prices.

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.

Take a position on indices

Deal on the world’s major stock indices today.

  • Trade the lowest Wall Street spreads on the market
  • 1-point spread on the FTSE 100 and Germany 40
  • The only provider to offer 24-hour pricing

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

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.