All trading involves risk. Ensure you understand those risks before trading.
Open account
☰
All trading involves risk. Ensure you understand those risks before trading.
Open account
✖

European Open: Sentiment Sours Ahead of the Open, Turkish Rate Decision Up Next

Article By: ,  Market Analyst
October 21, 2021 4:42 PM

Asian Indices:

  • Australia's ASX 200 index rose by 3.2 points (0.04%) and currently trades at 7,416.90
  • Japan's Nikkei 225 index has fallen by -419.24 points (-1.43%) and currently trades at 28,835.61
  • Hong Kong's Hang Seng index has fallen by -75.76 points (-0.29%) and currently trades at 26,060.26

UK and Europe:

  • UK's FTSE 100 futures are currently down -25.5 points (-0.35%), the cash market is currently estimated to open at 7,197.60
  • Euro STOXX 50 futures are currently down -12.5 points (-0.3%), the cash market is currently estimated to open at 4,159.67
  • Germany's DAX futures are currently down -37 points (-0.24%), the cash market is currently estimated to open at 15,485.92

US Futures:

  • DJI futures are currently up 152.03 points (0.43%)
  • S&P 500 futures are currently down -50.75 points (-0.33%)
  • Nasdaq 100 futures are currently down -11.25 points (-0.25%)

 

Indices:

Japan’s equity markets tracked the Nasdaq 100 lower overnight to see the Nikkei and TOPIX as the weakest indices, falling around -1.3% and -1% respectively. The stronger yen also contributed to weakness for the region, after extended rallies have left many currency pairs over-extended.

Although Fitch rating agency may have also played a part, after they placed 29 Chinese property developers under UCO (under criteria observation), as “industry conditions and the funding environment have weakened” since their exposure draft report in August. Evergrande shares also traded for the first time since their halt back on 30th September. Evergrande (3333) opened around -10% lower for the day, and investors are keeping a close eye on them as their 30-day grace period for their bond default is up in 2 days.

 

 

FTSE 350: Market Internals

FTSE 350: 4136.27 (0.08%) 20 October 2021

  • 155 (44.16%) stocks advanced and 185 (52.71%) declined
  • 6 stocks rose to a new 52-week high, 4 fell to new lows
  • 58.4% of stocks closed above their 200-day average
  • 32.48% of stocks closed above their 50-day average
  • 21.08% of stocks closed above their 20-day average

Outperformers:

  • + 4.32%-Hochschild Mining PLC(HOCM.L)
  • + 3.95%-John Wood Group PLC(WG.L)
  • + 3.07%-Syncona Ltd(SYNCS.L)

Underperformers:

  • -12.8%-Trustpilot Group PLC(TRST.L)
  • -6.69%-TUI AG(TUIT.L)
  • -4.95%-Draper Esprit PLC(GROW.L)

 

 

Forex: Yen catches bid late session

JPY is the strongest major as a tone of risk-off entered the late stages of the Asian session. With no sudden news (other than mentioned with Fitch and Chinese developers) we are currently assuming the announcement has reinforced fears of contagion for traders. USD/JPY looks like it wants to test 114 support and AUD/JPY and NZD/JPY are currently the weakest pairs (a classic sign of risk-off). We shall see how traders react after the open, and is worth noting that recent bouts of risk-off have started in Asia recently.

Turkey’s overnight borrowing rate decision will be announced at 12:00 BST. It’s a sore point for some, particularly the three central bankers that President Erdogan fired last week due to their opposition against rate cuts (which currently sit at 16.5% btw to fend off inflation of around 20%). Last month the central bank lowered rates by 100 bps which sent USD/TRY 1.34% higher on the day, following a 2-day pullback. Incidentally we find the pair has also pulled back for the past 2 days heading into today’s meeting.

In the US session the main calendar event is unemployment claims at 13:30 BST. As they sit at their lowest level in 19-months it would take a particularly large upside miss to spook markets, whereas similar levels of lower simply backs up the previous reads and helps to support sentiment (so the bigger reaction would likely be a upside miss).

 

Commodities:

WTI rose to $84 overnight although has retreated since yen inflows picked up. If this is the beginning of something bigger than oil prices could finally find themselves under pressure over the next session or two.

 

Up Next (Times in BST)

How to trade with City Index

You can trade easily trade with City Index by using these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    • Open an account in the UK
    • Open an account in Australia
    • Open an account in Singapore

  2. Search for the company you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

 

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

City Index is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

© City Index 2024