AM AnalysisRenewed concerns on a China slowdown
Renewed concerns on a China slowdown took to Asian markets overnight, sending the Nikkei 2.6% lower. The price of gold surged as investors took to the precious metal in search of safe heaven assets whilst Copper traded near its lowest level since 2010. European futures are indicating a lower open on thin volume. With a light economic diary ahead of us, volumes are likely to remain subdued.
The yen traded higher for a fourth day in a row as investors took to the currency following the standoff over Ukraine’s Crimean peninsula. According to Ukraine’s acting president, Oleksandr Turchynov, Russia’s leaders are refusing all negotiations with their Ukrainian counterparts.
WTI and Brent crude futures fell for a third day, the longest losing streak in two months following the worse than expected data in China which could reduce the demand for crude. Crude oil inventories later today are expected to show that inventories rose in the US, the world biggest oil consumer.
– Lee Mumford
PM Analysis
Global stock indices have found softer ground this afternoon
Global stock indices have found softer ground this afternoon, as investors chose to withdraw against continuing concerns over the Chinese economy and the situation in Ukraine. The default by a Chinese firm on its debt last week has reverberated around the world of finance, invoking a comparison of how the last crisis began, albeit on a much smaller scale. Copper, a metal very closely tied to the strength of the world’s second largest economy, has suffered some of its heaviest losses in recent memory. Yet some diversified mining stocks seem to have now priced in some of the downside, having slid ~20 percent in a little over a month.
Crucially, investors will be looking to see if equities can continue to stage a rally into the close as they have done previously. If they can, the case for owning risk is supported to at least some extent in the near-term. More concerning is when stocks find their lows at the close on heavy flow.
– David White
Disclaimer
Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk.