Stocks Rally Into The Weekend

Stocks across Europe continued Asia’s move higher, initiated by China’s renewed commitment to stimulus amid slowing growth momentum. Weak US manufacturing initially dampened enthusiasm for riskier assets, but investors quickly shrugged it off

Stocks across Europe continued Asia’s move higher, initiated by China’s renewed commitment to stimulus amid slowing growth momentum. Weak US manufacturing initially dampened enthusiasm for riskier assets, but investors quickly shrugged it off. Wall Street moved firmly higher with the Nasdaq jumping over 1%

Have the DUP set their price?
Both the pound and the FTSE were on the front foot, continuing to show an impressive level of strength at the end of a politically fraught week. Following a series of 3 votes on Brexit, the PM has won time to bring her Brexit deal back to the House of Commons for a third meaningful vote on Tuesday 20th. 

The pound is finding support from rumours that the DUP could be about to get behind the Theresa May’s deal in exchange for another hefty sum. As Hammond is drawn into negotiations, similarities can be drawn to when the DUP agreed to prop up the government for £1 billion, in 2017. Other Eurosceptic Conservatives ministers are also expected to draw behind the PM’s Brexit in fear of the UK never leaving the EU at all.

US manufacturing falls for 2nd straight month
Weaker US manufacturing data put a damper on an otherwise buoyant session. US industrial production rose 0.1% in February, lower than the 0.4% expected. This is just the latest piece of evidence that points to a sharp slow down of economic growth in the first quarter of this year. Retail sales, housing and manufacturing have all produced soft reports so far this year, supporting to the Fed decision to be patient with policy changes. The dollar swiftly declined following the release. 

EUR/USD at 10 day high
EUR/USD surged to a 10 day high following the US manufacturing print. Eurozone inflation ticking higher to 1.5% had helped keep the euro steady across the morning before it seized on the weaker dollar, climbing to $1.1345. 

Palladium at record high
The weaker dollar helped gold push back over $1300 after dipping 1% in the previous session.  Palladium stole the show jumping to a record high of $1567.50. Speculation that Russia will ban the export of the palladium scrap has pushed buyers into panic mode. With the supply outlook tightening the bulls are firmly in control. These elevated levels could comfortably be maintained, with $1600 the next big level to watch for. 


Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (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.