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.
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.

European Open: ‘Jack in the box’ trading continues

Article By: ,  Market Analyst

Asian Indices:

  • Australia's ASX 200 index rose by 112.3 points (1.54%) and currently trades at 7,426.20
  • Japan's Nikkei 225 index has risen by 424.11 points (1.49%) and currently trades at 28,880.66
  • Hong Kong's Hang Seng index has fallen by -28.75 points (-0.12%) and currently trades at 23,954.91
  • China's A50 Index has risen by 182.67 points (1.16%) and currently trades at 15,969.88

UK and Europe:

  • UK's FTSE 100 futures are currently up 3 points (0.04%), the cash market is currently estimated to open at 7,342.90
  • Euro STOXX 50 futures are currently up 8 points (0.19%), the cash market is currently estimated to open at 4,284.20
  • Germany's DAX futures are currently up 18 points (0.11%), the cash market is currently estimated to open at 15,831.94

US Futures:

  • DJI futures are currently up 492.4 points (1.4%)
  • S&P 500 futures are currently up 86.25 points (0.53%)
  • Nasdaq 100 futures are currently up 18.25 points (0.39%)

Asian equities jump higher in line with sentiment

Of course, the force which suppressed prices was the Omicron variant and there now seems to be no shortage of headlines suggesting all is well. And that lift in sentiment saw Asian equities race out of the gates as they tracked Wall Street higher in a similar fashion.

The ASX 200 did its best impression of a telegraph pole by opening at the low and now on track to close at the high of the day, and currently up around 1.6%. Japan’s markets were the leaders with the Nikkei 25 rising over 1.9% and China’s A50 up around 1.1%. The Hang Seng was underwater slightly, weighed down by Kaisa which missed a debt payment and Evergrande hit a new low.

GBP feels the weight of commodity FX

The US dollar index saw a false break above 96.43 resistance yesterday and closed with an indecision candle. Traders appear hesitant to front-run Friday’s CPI data, and perhaps there are downside risks given the consensus is for already hot-inflation to heat up further. If so, perhaps euro saw the low for the week yesterday above the 1.1 handle.

The British pound felt the might of commodity FX yesterday, with GBP/AUD hitting a 1-week low yesterday and sliding a little further today. GBP/NZD printed a bearish outside day at its 2-month high, whilst GBP/CAD fell to our initial 1.6730 target near the November low. We favour GBP/CAD for further shorts.

GBP/CAD teases November low

The daily chart remains in a strong downtrend, and momentum realigned with that trend yesterday after repeatedly failing to break above 1.7100. Yesterday’s bearish candle broke trend support with ease and prices are now hugging the lows. We suspect any upside bounce from here could be limited and a break back to the March 2020 low (1.6551) to be the path of least resistance.

BOC rate decision is the main event today

It’s their final show of the year and the central bank is expected to hold rates at 0.25%. Yet with economists expecting four hikes in 2022 they’ll be looking for some form of assurance current expectations are correct. Therefore, the contrarian approach is to short CAD should the central bank not be as hawkish as hoped today, whilst the biggest bullish surprise (although not likely) would be for a hike at this meeting. And with GBP/CAD at a key support level heading into the meeting it provides a clear pivotal level for markets to trade around.

FTSE 350: Market Internals

FTSE 350: 4199.99 (1.49%) 07 December 2021

  • 293 (83.48%) stocks advanced and 53 (15.10%) declined
  • 18 stocks rose to a new 52-week high, 1 fell to new lows
  • 55.84% of stocks closed above their 200-day average
  • 76.35% of stocks closed above their 50-day average
  • 17.66% of stocks closed above their 20-day average

Outperformers:

  • + 9.26% - Moonpig Group PLC (MOONM.L)
  • + 9.10% - Trustpilot Group PLC (TRST.L)
  • + 8.10% - Network International Holdings PLC (NETW.L)

Underperformers:

  • -2.67% - Baltic Classifieds Group PLC (BCG.L)
  • -1.94% - B&M European Value Retail SA (BMEB.L)
  • -1.90% - Domino's Pizza Group PLC (DOM.L)

 

Up Next (Times in GMT)

 

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

 

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