Market News & Analysis

Risk starts week on positive note, busy news week coming up

May 20, 2019 | Market Update

High-impact economic news:

N/A

So far Monday’s trade has seen a return to risk, after last week ended on a weaker note for stocks. Traders heavily favoured safe havens like the USD and Yen most of last week as we saw some strong selling on the EUR, AUD and GBP. 

The ASX and AUD have seen good demand this morning boosted by the Australian elections that showed a surprise Liberal party win. The Labor party was the favourite heading into Saturday’s voting but failed to take key seats in Queensland. Scott Morrisons return to power has been compared to some of the recent underdog shocks including Trump’s win. Regardless of how it’s spun the facts are a majority of Australian voters were not sold on Bill Shortens and Labors policies. 

The AUD has been the main risk currency in movement, the AUD opened higher with solid gaps to the USD and JPY. The ASX is trading 0.5% higher. Stocks in Asia are mixed the Nikkei higher while China remains in the red with confidence remaining low after Friday’s sell-off. Some Chinese stock indexes lost over 2% in Friday’s trade due to ongoing trade worries with the U.S. Huawei is another factor, the U.S. government is now saying you will need a licence to deal with the Chinese telecommunications company.

Brexit worries came back into the spotlight on Friday sending the GBP sharply lower, the GBPUSD lost 74 pips. The drama that is Brexit continues, UK prime minister May is facing calls to resign Labour talks collapse killing off the current EU withdrawal plan. 

The flight to safety in Friday’s session didn’t favour Gold as it was hammered $8.80 lower, Gold had a week to forget losing $25.90 from it’s high. the USD was one of the main negative influences for the yellow metal. 

This week traders will continue to focus on trade updates between the U.S and now we can also add the EU into the mix. Brexit has returned to the radar and could create volatility for the GBP. News wise its busy data wise, some of the key events will be The FMOC meeting minutes and European Parliamentary Elections which start on Thursday and run through to Sunday. 

GBPUSD daily chart showing the 277 pip washout last week. That was one potent Lower High!

Good trading from EightCap

Sources – CNBC

* The information provided here has been prepared by EightCap’s team of analysts. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and do not reflect the opinions of EightCap.

In addition to the disclaimer on our website, 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. EightCap 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.

Please note that past performance is not a guarantee of or prediction of future performance. This communication must not be reproduced or further distributed without prior permission.

 

 

 

 

 

HEAD OFFICE

Level 6, 360 Collins Street
Melbourne, VIC
3000 Australia

Risk Warning: Margin trading involves a high level of risk, and may not be suitable for all investors. You should carefully consider your objectives, financial situation, needs and level of experience before entering into any margined transactions with EightCap, and seek independent advice if necessary. Forex and CFDs are highly leveraged products which mean both gains and losses are magnified. You should only trade in these products if you fully understand the risks involved and can afford losses without adversely affecting your lifestyle (including the risk of losing substantially more than your initial investment). A Product Disclosure Statement (PDS) and a Financial Services Guide (FSG) for our products are available to download from our Legal Documentation page. You must assess and consider them carefully before making any decision about using our products or services.

EightCap is a registered business name of EightCap Pty Ltd (ABN 73 139 495 944). We are regulated by the Australian Securities & Investments Commission (ASIC) - our AFSL number is 391441. This licence authorises us to provide financial services to people in Australia.

The information on this website is of a general nature only and is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. EightCap is not a financial adviser, and does not issue advice, recommendations, or opinion in relation to acquiring, holding or disposing of a margined transaction. We provide general advice only and accordingly you should consider how appropriate the advice (if any) is to your objectives, financial situation and needs before acting on the advice.