Open account
☰
Open account
✖

European Open: Boris Clings on, gold buckles under its own weight

Article By: ,  Market Analyst
July 7, 2022 6:49 AM

Asian Indices:

  • Australia's ASX 200 index rose by 42.5 points (0.64%) and currently trades at 6,637.00
  • Japan's Nikkei 225 index has risen by 381.43 points (1.46%) and currently trades at 26,489.08
  • Hong Kong's Hang Seng index has risen by 15.21 points (0.07%) and currently trades at 21,601.87
  • China's A50 Index has risen by 82.08 points (0.56%) and currently trades at 14,782.03

     

    UK and Europe:

  • UK's FTSE 100 futures are currently up 90.5 points (1.28%), the cash market is currently estimated to open at 7,198.27
  • Euro STOXX 50 futures are currently up 46 points (1.35%), the cash market is currently estimated to open at 3,467.84
  • Germany's DAX futures are currently up 158 points (1.26%), the cash market is currently estimated to open at 12,752.52

     

    US Futures:

  • DJI futures are currently up 110 points (0.35%)
  • S&P 500 futures are currently up 59 points (0.5%)
  • Nasdaq 100 futures are currently up 14.75 points (0.38%)

 

 

Boris clings on despite 44 resignations

Despite growing excitement from his foes, Boris Johnson will not face a new confidence vote this week. Instead, the Conservative Party Committee decided to elect a new executive before considering such a move, and the election for said member is on Monday. Therefore, a new vote of confidence would be next week at the earliest assuming there is one at all.

  • 44 members of government have now resigned from the government in protest of Boris Johnson not stepping down as PM.
  • Johnson maintains his defiance and vow not to design despite growing
  • Johnson has fired Michael Gove, after Gove threatened to quit of Johnson did not resign.

 

AUD and NZD rally in Asia

AUD and NZD are the strongest currency after Australia reported a record trade surplus, thanks to the energy boom. Strong domestic demand coupled with rising coal and LNG exports saw the trade balance rise to $15.9 million and exports rise 9% in May.

The US dollar index has pulled back from its 1-year high, allowing commodity FX pairs to lift further from their lows. At some point the dollar’s rally will falter, but there are no obvious immediate signs. The closest clue we have to a loss in momentum on DXY (dollar index) is that yesterday’s bullish range was around half compared to Tuesday’s.

 

Gold 4-hour chart:

Clearly, a strong US dollar has been a key driver for the selloff seen on gold. But it is not the only reason, as capitulation appears to be a driver for gold right now. It cut through 1800 and 1750 like a hot knife through butter – but I’d usually expect some sort of support at such big levels. And as gold spent an extended period in choppy trading conditions above 1800, a break beneath it was a game-changer for many and likely triggered large stops and a rush for the exit.

Whilst prices remain below 1850 then the 1821 support level / September low could appeal to bears.

 

 

FTSE 350 – Market Internals:

FTSE 350: 3943.39 (1.17%) 06 July 2022

  • 293 (83.48%) stocks advanced and 55 (15.67%) declined
  • 4 stocks rose to a new 52-week high, 27 fell to new lows
  • 16.24% of stocks closed above their 200-day average
  • 28.49% of stocks closed above their 50-day average
  • 5.98% of stocks closed above their 20-day average

Outperformers:

  • +9.43% - Trainline PLC (TRNT.L)
  • +3.96% - Scottish Mortgage Investment Trust PLC (SMT.L)
  • +3.05% - Chrysalis Investments Ltd (CHRY.L)

Underperformers:

  • ·-15.04% - Fresnillo PLC (FRES.L)
  • ·-8.64% - Harbour Energy PLC (HBR.L)
  • ·-5.62% - Energean PLC (ENOG.L)

 

 

Economic events up next (Times in BST)

  • BOE MPC member Catherine Mann speaks at 09:00 on “the rise of inflation and global monetary policy issues.
  • BOE Chief Economist Huw Pill speaks at 17:05 on the economy.
  • Canada release trade data at 13:30 and they’re going in from a position of strength, with exports having risen 28.4% y/y in April and a trade surplus of CA$1.5 billion.
  • The Fed’s Waller and James Bullard speak at 18:00 speaks on the economy and monetary policy.

 

How to trade with City Index

You can 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

 

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.

© City Index 2024