You are here: Home > articles > Forex > European Open Preview – Companies sound warning on China; Brexit saga rumbles on
European Open Preview – Companies sound warning on China; Brexit saga rumbles on
January 29, 2019 9:26 amVideo
Latest News
- Trading Signals for GOLD (XAU/USD) for April 19-22, 2024: sell below $2,395 (+2/8 Murray – overbought) April 19, 2024
- USD/JPY: Simple Trading tips for novice traders on April 19th (US session) April 19, 2024
- GBP/USD: Simple trading tips for novice traders on April 19th (US session) April 19, 2024
- EUR/USD: Simple trading tips for novice traders on April 19th (US session) April 19, 2024
- GBP/USD: trading plan for the US session on April 19th (analysis of morning deals). The pound is trying to regain its advantage April 19, 2024
- EUR/USD: trading plan for the US session on April 19th (analysis of morning deals). The euro compensated for the losses April 19, 2024
- Storm in a teacup: EUR/USD analysis April 19, 2024
- Video market update for April 19, 2024 April 19, 2024
- Eurozone PMIs eyed as euro’s focus turns to rate cuts beyond June – Preview April 19, 2024
- Technical Analysis – NZDUSD falls to fresh 5-month low April 19, 2024
- EUR/USD. April 19th. Bostic, Fed: the rate cut will happen at the end of the year April 19, 2024
- Forecast for GBP/USD pair on April 19, 2024 April 19, 2024
- Weekly Forex Outlook: 14/04/2024 – US GDP and BoJ decision on top of next week’s agenda April 19, 2024
- Market Comment – Safe havens jump as Israel retaliates against Iran April 19, 2024
- Technical Analysis – USDCAD puts rally on hold near 1.3800 caution zone April 19, 2024
- USD/JPY: trading tips for beginners for European session on April 19 April 19, 2024
- GBP/USD: trading tips for beginners for European session on April 19 April 19, 2024
- EUR/USD: trading tips for beginners for European session on April 19 April 19, 2024
- Supercharged US dollar turns to GDP growth data – Preview April 19, 2024
- Technical Analysis – USDCHF remains in bullish structure April 19, 2024
Corporate warnings on China rattle stocks, drag oil lower
US equity markets closed in the red, after industrial bellwether Caterpillar (-9.1%) reported disappointing earnings and chipmaker Nvidia (-13.8%) slashed its revenue forecasts, both companies pointing the finger to weakening demand in China. The S&P 500 (-0.78%) fell modestly, while oil prices plunged, with WTI dropping by roughly 3% as investors reassessed the outlook for growth in the world’s second-largest economy. It’s striking that crude’s heavy losses came despite the US announcing sanctions on Venezuela’s oil industry, and Saudi Arabia hinting at deeper production cuts.
Sentiment remains in the doldrums early on Tuesday as well, with Asian markets closing mostly lower. Meanwhile, futures tracking the likes of the S&P 500 and Dow Jones are pointing to a negative open today. The latest wave of pessimism is likely owed to overnight news that the US Justice Department filed criminal charges against Huawei and its CFO, who is under arrest in Canada. Although both China and the US have maintained that this case is entirely separate from the trade dispute, the market reaction implies that traders nevertheless believe this could hamper progress in these pivotal talks, the next round of which begins tomorrow.
UK Parliament votes: Brexit clarity, or more uncertainty?
This could be a decisive day for the Brexit process, as lawmakers will vote on Theresa May’s alternative Brexit plan, and more crucially, on amendments to it. Given that there is no obvious majority for anything in the House of Commons, a series of votes will be held to determine which plan commands the most support. The two most popular amendments come from lawmakers Cooper and Brady, the former aimed at avoiding a no-deal exit and the latter at replacing the Irish backstop with “alternative arrangements”.
PM May has thrown her weight behind the Brady amendment, which if accepted would mean the backstop has to be renegotiated – something the EU has denied repeatedly absent a change of position from the UK. May seems to believe the EU will be more willing to talk if she has a mandate from her lawmakers, though it’s truly an open question whether the EU has any incentive to do so. As for the pound, its performance may depend on which amendments pass, if any. An approval of the Cooper amendment for instance would see the risk of a no-deal diminish further and likely support sterling. On the flipside, if no amendment passes, there would be no clear plan for proceeding, keeping the Brexit process in limbo.
Day ahead: Earnings season in full throttle, second-tier US data due
Moves in the FX market were subdued otherwise, with the US dollar trading nearly flat against a basket of six major currencies as traders seemed reluctant to assume major positions ahead of tomorrow’s Fed policy decision. Before that though, attention may turn to the CB consumer confidence index today, as well as on the Case-Shiller housing price index. While neither is typically a major market mover for the dollar, concerns around housing market weakness and a broader economic slowdown may render these more important than usual.
In stock markets, the earnings season continues in earnest today. Notable names releasing their quarterly results include Apple and Ebay, both after the US market close. It will be interesting – and crucial for sentiment – to see whether Apple echoes the recent concerns around China’s slowdown. Pfizer and Harley Davidson will announce their own figures before Wall Street’s opening bell.
Finally, Australia’s quarterly inflation data will be in focus during the early Asian session on Wednesday, at 0030 GMT.
Related Posts: