CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖

AU Q3 GDP preview and what Omicron means for the ASX200

November 29, 2021 4:45 AM

This week the critical issues in Australia will be how investors respond to the uncertainty created by Omicron and headlines on Wednesday that will confirm the Australian economy shrunk in the third quarter of 2021.

The news that the economy shrunk in Q3 should not come as too much of a surprise after extended lockdowns in NSW, Vic, and ACT. For the record, the market is looking -2.7% fall in the Q3 - not as bad as initially feared after the release of stronger than expected Capex and Construction works surveys last week.

Now, to the arrival of Omicron last week, which followed a series of worsening Covid headlines from out of Europe. Recently a friend of mine pointed me in the direction of a podcast called The Future of Vaccines with the CEO of Moderna, Stéphane Bancel. Given last week's developments, it's well worth a listen. The link is here for those that are interested.

Omicron carries many mutations in its spike protein, raising concerns that existing vaccines may be less effective and has higher transmissibility. However, thanks to the platform of mRNA technology, and as outlined in the podcast, a vaccine for Omicron will likely be available within months.

Providing hospitalisations and fatalities don’t rise significantly in the meantime, it is likely that as the panic subsides and calmer heads prevail, the market will recover lost ground. Evidence of this is already demonstrated today by the ASX200 trading at 7261, just 18 points lower from Friday's close at 7279.

From here, while it's impossible to rule out a test of the psychologically important 7000 region, the ASX200’s rapid rebound today above the 200 day moving average at 7220 today has been impressive.

Nonetheless, to increase conviction that the Omicron correction is complete and the uptrend has resumed, the ASX200 must reclaim Friday's breakdown level at 7350ish.

Source Tradingview. The figures stated areas of November 29th, 2021. Past performance is not a reliable indicator of future performance.  This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

How to trade with City Index

You can trade with City Index by following 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

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

© City Index 2024