Laying out the red carpet for central banks
Markets look to be adrift ahead of the slew of events this week including the likes of the European Central Bank where further support for the markets is expected.
Cyclicals in favour again
Wall Street concluded Monday little changed awaiting fresh leads to take its hike further. As far as the comprehensive S&P 500 index is concerned, prices had shot past the short-term 50-day moving average to consolidate higher between that and the 3000 level. A look at the sectoral breakdown of the S&P 500 index in the past 5-session period and it would perhaps be of no surprise seeing the cyclicals and defensives divide showing rather apparently. And unlike the trend a couple of weeks ago, the cyclical sectors evidently appeared to have the wind beneath their wings.
While we will not go into details as to why the rally alongside the latest turns in geopolitical events may be founded on unsteady foundation, anticipation for the slew of central bank support may nevertheless help to support prices. As told in our Asia week ahead, the European Central Bank meeting is lined up this week, packing the hopes of a deposit rate cut in addition to the restarting of quantitative easing (QE). Following suit in the coming week will be the likes of the Federal Reserve and the Bank of Japan. One would also recall that the People’s Bank of China (PBoC) had only recently announced the RRR booster and has fuelled anticipation for further stimulus. Thus, while the market muddles along in geopolitics uncertainties that retain, the short-term outlook for the market looks to be positive with one dose of monetary policy support after another.
Source: Reuters, IG
Asia open
Optimism from the September Fed cut and Chinese stimulus had helped to carry Asia markets against the disappointing August trade figures at the start of the week. Amid the lack of fresh leads, regional indices may ensue in the lacklustre fashion, tracking that as seen from Wall Street.
Of attention in the Asia session would be the slew of Chinese releases, including August’s producer and consumer price inflation readings. The current consensus is pointing towards a steeper decline for August’s producer inflation reading to -0.9% year-on-year to reflect a poorer demand picture. This will mark the lowest seen since July 2016, one to watch after the disappointing exports performance, although the recent spate of policy support announcement may help to dull the impact on markets.
Yesterday: S&P 500 -0.01%; DJIA +0.14%; DAX +0.28%; FTSE -0.64%
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.
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. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
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
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.
