CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider.You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Central banks, trade tensions to drive markets

A semblance of calm and positivity shines over the start of the week where a series of central bank updates and potential trade news are expected to continue driving markets.

Positive start to the week for Asia

Going against the trend in the past couple of weeks, a positive commencement to the week for Asia markets appeared to be the case. This comes on the back of a moderate recovery in recession fears for Wall Street going into the end of last week and the clear absence of the ratcheting up of trade tensions and geopolitical unrests over the weekend. On the converse, President Donald Trump who convened with Apple CEO Tim Cook had made a strong case for investors to carry hopes for improvement after the President noted that a ‘good case’ on tariffs had been made in Apple’s situation. This is significant for markets seeing this favourite amongst the US FANG stocks having been hit in the past weeks on the back of the latest tariffs proposition.

Separately, geopolitical tensions sustain, but it appears to have taken a relatively peaceful course in Hong Kong’s case. The first largely peaceful rally in 11 weeks were reported to have taken place according to the Straits Times. While further clashes should not be ruled out, this will temporary lay to rest some concerns of Chinese intervention that could exponentially escalate the situation.

Volatility remains the mainstay

All the above said, there may perhaps be little doubt that volatility would sustain going forth. As told in our Asia week ahead note, US-China trade tension concerns and central banks watch will be key this week. The fact remains that the US administration is hesitant in engaging in a trade deal with China at present. Doubts casted on Huawei’s license extension alongside a decision to be made on Monday with regards to the matter according to President Trump also comes on the heels of China’s vow for retaliation, items that could further rock the market this week.

Meanwhile on monetary policy, central bank minutes from both the Federal Reserve and the European Central Bank (ECB) are expected. Investors will likely be looking more to the Jackson Hole symposium for an updated view by the Fed, with the event also being a major one prior to the September 1-18 Federal Open Market Committee (FOMC) meeting where a rate cut is expected. As it is, the positive Asia open and the clear abating of fear, as told by USD/JPY’s trade to $106.30 levels, are suggesting that hopes for support permeates. The fear here is that the Fed may not deliver despite growing concerns that the Fed had fallen behind the curve in easing monetary conditions. One to watch. The ECB’s July minutes meanwhile would be parsed for evidence of rate cut suggestions and other stimulus plans.

Friday: S&P 500 +1.20%; DJIA +1.44%; DAX +1.31%; FTSE +0.71%

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.

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 30
  • 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

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 CFDs.

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