Market Brief: EU stocks recover after weaker open

A summary of news and snapshot of moves ahead of the US session.

  • At mid-morning London, CHF, JPY and GBP were among the strongest while the AUD was the weakest in major currencies. Despite the “risk-off” tone from the FX markets, stocks turned positive after a weaker open. Crude oil prices were a touch firmer. Gold, silver and copper all eased back. Bond yields remained soft. It has been a quiet-ish day with Australia and China out, and with only a couple of noteworthy data releases on the economic calendar.
  • Among today’s data highlights, German factory orders fell 0.6% month-over-month in August versus a drop of 0.4% expected, while investors in the Eurozone turned more pessimistic as the Sentix Investor Confidence index deteriorated to -16.8 from -11.1 previously. Despite this, the EUR/USD was flat, clinging onto the key 1.0960 short-term support. US Federal Reserve Chair Jay Powell is speaking at 18:00 BST.
  • Stocks: index futures gapped lower at the open overnight before staging a small recovery. Bloomberg reported that Chinese officials on recent visits to the US have indicated the range of topics they’re willing to discuss as part of a potential trade deal has “narrowed considerably.”
  • The markets had ended higher in the last two days of the previous week after suffering big losses earlier amid concerns over company earnings growth following the release of disappointing macro data, which pointed to a slowdown in economic activity, most notably in US manufacturing. But an unexpected drop in US unemployment rate on Friday eased concerns over a potential recession, allowing the markets to breathe a sigh of relief.
  • With macro concerns back to the forefront of investors’ minds, there will be plenty of economic data to drive sentiment this week, particularly from Europe. In addition, we will have US inflation figures and Canadian employment data to look forward, as well as minutes from both the ECB and FOMC’s last policy meetings. The US-China high level trade talks are also expected to start this week, too.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.