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%

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

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

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


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

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.