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: risk assets climb as USD retraces

Europe is expected to start the day up after gains across Wall Street and an encouraging GDP number out from Japan.

APAC overview

The Nikkei rose 2.31% overnight, after Japan's economy grew more than initially reported in the second quarter (Q2). Gross domestic product (GDP) expanded 3.5% in the second quarter year-on-year (YoY), stronger than the preliminary estimate of annualised 2.2% growth, and better than a median market forecast for a 2.9% gain.

Private consumption grew 1.2%, revised up from an initial estimate of a 1.1% increase. Capital spending rose 2%, also revised up from a preliminary estimate of a 1.4% rise.

In Australia, trade surplus shrank by more than expected in July as exports of iron ore and coal dropped by 15% and 17% respectively, while imports jumped 5.2%.

Central Banks

The ASX 200 also rose sharply after Reserve Bank of Australia (RBA) governor, Philip Lowe, said the RBA Board was not on a pre-set path and was aware rates had already risen sharply. "We are conscious that there are lags in the operation of monetary policy and that interest rates have increased very quickly, and we recognise that, all else equal, the case for a slower pace of increase in interest rates becomes stronger as the level of the cash rate rises."

Yesterday, the vice chair of the Federal Reserve (Fed), Lael Brainard, reiterated the central bank's priority is still making sure that inflation is controlled. While she is aware of the increasing threat the Fed policy poses to economic growth, "monetary policy will need to be restrictive for some time to provide confidence that inflation is moving down" to the Fed's 2% target.

Also yesterday, the Bank of Canada (BoC) hiked its policy rate to 3.25% from 2.50%, as expected. Rates are now above the BoC's neutral range, but the bank still signalled its tightening campaign was not yet done. "Given the outlook for inflation, the Governing Council still judges the policy interest rate will need to rise further," the central bank said in a statement. "As the effects of tighter monetary policy work through the economy, we will be assessing how much higher interest rates need to go to return inflation to target."

At Lunchtime, European Central Bank (ECB) policymakers are set to deliver another bumper hike today. Economists seemed divided earlier this week, between 50 or 75 basis points (bps). It looks like a hike of three quarters of a percentage point is now expected by a majority of economists.

Commodities

Oil prices are rebounding modestly this morning, after losing as much as 5% during yesterday’s session.

The API reported an increase for crude oil stocks of 3.65 million barrels, while analysts predicted a draw of 733,000 barrels, as the Department of Energy released 7.5 million barrels from the Strategic Petroleum Reserves.

The API also reported a fall in gasoline inventories this week of 836,000 barrels, while distillate stocks saw an increase of 1.83 million barrels.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Related articles

Live prices on most popular markets

  • Equities
  • Indices
  • Forex
  • Commodities
website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.

" edit-mode="false" style="--live-prices-table-rows:5" >


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

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

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.


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 spread betting and CFDs.

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


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. See full non-independent research disclaimer and quarterly summary.