market relief

China’s import data last night gave trades a reason to buy mining companies like Glencore, Rio Tinto, BHP Billiton and Anglo American. 

Europe

China’s import data last night gave trades a reason to buy mining companies like Glencore, Rio Tinto, BHP Billiton and Anglo American.

The mineral hungry nation posted saw imports rise by 17.2% in October, and traders were expecting a rise of 16%. The fact that previous reading was revised lower to 18.6% from 18.7% played on traders’ minds, as did the slowdown in the growth of imports. The latest manufacturing figures from China showed the sectors is expanding, and next week traders will be focused on the industrial production report.

The FTSE 100 is holding up better than the eurozone equity benchmarks as it has a relatively high exposure to commodity related stocks. Continental stock markets have been slowing giving back some of the gains that were notched up in the last couple of months.

Marks and Spencer shares have endured a choppy trading session after the retailer revealed its first-half figures. In the six month period revenue grew by 2.6% and profits dropped by 5.3%. M&S has usually had a strong food division to compensate for the weaker clothing department, but like-for-like food sales slide by 0.1%. The CEO, Steve Rowe said the food division is up against ‘stronger headwinds’. After spending some time in the red, the stock is now up 1.2%.

 

US

US indices are slightly in the red as the bulls take a bit of a breather. There are ongoing worries that Donald Trump’s tax proposals could be held up. The prospect of a pro-business tax regime has been a factor in the bullish run that US stocks have been enjoying lately, and the talk of a delay has taken some heat out of the market.

Political wrangling was always going to be an issue ,and investors are wondering when an agreement will be reached, and how different will the final tax reform be from the one Mr Trump originally put forward.

Shares in Snap are down 15.7% after the company released third-quarter numbers last night that failed to meet analysts’ expectations. For some tech stocks, the daily active user figure is closely watched, and Snap’s figure was 178 million, while the consensus was for 180.8 million. Revenue for the period was $207.9 million, and trader were anticipating it to be $236.9 million.

 

FX

GBP/USD has been drifting lower throughout the day. At the start of the week the pound was trying its best to recoup some of the ground it lost on the back of the Bank of England’s dovish hike, and now it seems as if the bargain hunters have disappeared. The trend line support that has been in place since March is being tested. The $1.3000 level would be deemed to be important by some traders.

EUR/USD is largely unchanged on the day as it has been a slow news day for the eurozone. Spain produced respectable industrial production figures for September, which came in at 3.4%, better than the 3.2% the market was expecting, and a significant improvement on the August report of 1.8%. The survey was taken before the situation in Catalonia flared up, so the announcement next month will be interesting.  

 

Commodities

Gold has gained ground on account of the weakened US dollar. The slide in the greenback is related to the concerns that Trump’s tax reform could be delayed. The dollar was propelled higher when dealers were optimistic that it would be introduced, and now the hold-up has brought about a flight to quality trade.  

WTI and Brent Crude oil are in the red as traders viewed the surprise rise in US oil inventories as an opportunity to bank their profits. The energy information administration showed that US oil stockpiles increased by 2.23 million barrels and dealers were expecting to see a draw of 2.9 million barrels.

This week the oil market hit a level not seen since June 2015 as a shift in power in Saudi Arabia has fuelled fears the nation may look to keep supply down.  

 

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