Click here to receive new analysis by email

A September rate rise is now 'less compelling'

Chinese stock markets closed down with a ‘relative calm’ yesterday - 1.5% - in Shanghai and Shenzhen. This presented traders in the US with the right signals to put a floor to the 9% slide in stocks over the past successive sessions. Coupled with the first signs of “Fedspeak” (from Fed Governor William Dudley) suggesting that the case for a September rate rise is now ‘less compelling’, traders took the cue to buy. Major indices in the US enjoyed a rare risk-on ‘intermission’ to the pummeling that stocks received this past week. The S&P gained 3.9%, registering its biggest rally since 2011. However despite this record move, both the Dow and S&P 500 remain in correction territory. Flight to safety hideouts like the VIX gave up as much as 6.5% (Volatility Index Sept 2015) while gold slumped to its lowest level in over a week as traders played into the stock market’s bounce. Meanwhile crude took another slight hit last night, despite release by the IEA showing a surprise drop in inventories last week. WTI fell towards its low of USD38 per barrel. From the chart below, apart from a seven-day second degree counter-trend consolidation in early July, crude’s fall from USD60 in end June has been a one way ride. The current consolidation at this support of USD38 is critical with a bounce here being a possibility as we reach a point of inflexion at the cross of trend lines. A break below the red line could accelerate the selling while any bounce above the blue line may bring short covering for this commodity.



IMPORTANT NOTE AND DISCLAIMERS

Market Opinions
Any opinion(s), news, research, analyses, prices, or other information contained on this website / document is provided as general market commentary and are from publicly available resources or otherwise obtained, and does not constitute investment advice nor does it seek to market, endorse, recommend or promote any investment or financial product. CMC Markets Singapore Pte Ltd. (Reg No./UEN: 200605050E) (“CMC Markets”) will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

Accuracy of Information
The content is subject to change at any time without notice, and is provided for the sole purpose of assisting traders to make independent investment decisions. CMC Markets has taken reasonable measures to ensure the accuracy of the information, however, does not guarantee its accuracy, and will not accept liability for any loss or damage. CMC offers no financial advisory services in any of the content or vouch for the veracity of any information.

Distribution
The content of this publication is not intended for distribution, or use by, any person in any country where such distribution or use would be contrary to local law or regulation. None of the services or products referred to or mentioned are available to persons residing in any country where the provision of such services or investments would be contrary to local law or regulation. It is the responsibility of the reader to ascertain the terms of and comply with any local law or regulation to which they are subject.

Third Parties
CMC Markets may provide you with opportunities to link to, or otherwise use, sites and services offered through or by third-party(ies). Your use of these third-party services is subject to such terms as posted by these third-party(ies). We have no control over any third-party site or service and we are not responsible for any changes to any third-party service or for the contents thereof, including, without limitation, any links that may be contained in or accessible through such third-party service. These links are provided solely as a convenience to you. You will need to make your own independent judgment regarding your interaction with these third-party sites or services. Our inclusion of advertisements for, or links to, a third-party site or service does not constitute an endorsement of any of the representations, products or services listed therein.

Important Note
Each reader/recipient agrees and acknowledges that: (a) no express undertaking is given and none can be implied as to the accuracy or completeness of this document; (b) this document does not constitute in any way a solicitation nor incentive to sell or buy any Shares, Stock Options and Contracts For Difference (CFDs) and similar and assimilated products; (c) each reader/recipient of this document acknowledges and agrees to the fact that, by its very nature, any investment in Shares, Stock Options, CFDs and similar and assimilated products is characterised by a certain degree of uncertainty; that consequently, any investment of this nature involves risks for which the reader/recipient is solely responsible and liable. It is to be noted that past performance is not necessarily indicative of future results. In this respect, past performance of a financial product do not guarantee any and are not an indication as to future performance; (d) the use and interpretation of this document require financial skill and judgement. Any utilisation whatsoever by the reader/recipient, relating to this document, as well as any decision which the reader/recipient may take regarding a possible purchase or sale of Shares, Stock Options, CFDs and similar and assimilated products, are the sole responsibility and liability of the reader/recipient who acknowledges and agrees to this as a condition precedent to and prior to any access to this document; (e) as a result of the above, all legal liability directly or indirectly arising whatsoever.