Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Global Equities Cautious In Last Full Week Before Christmas

Published 12/17/2018, 04:54 AM
Updated 04/25/2018, 04:10 AM

European bourses are set to open higher, after being hit by a bout of risk aversion in the previous week. Global equities were hammered on global growth fears following weak data from China and the eurozone. Investors are now looking ahead to the Fed’s policy announcement on Thursday for further clues. Whilst a fourth hike this year is broadly expected, investors are more concerned with what lies ahead for 2019.

May Firm on No 2nd Referendum

After 5 consecutive weeks of losses, the prospects for the pound aren’t looking much better this week. All things Brexit will continue driving movement in the pound. With Theresa May under increasing pressure to end the Brexit deadlock, currency markets are only too aware that things could quickly spiral towards a no deal or even a general election. Suggestions of a second referendum are growing in volume as an increasing number of senior minister’s view this as the only way out of the current impasse, whilst avoiding a hard no deal Brexit. Theresa May is vocally against the idea. We would expect a second referendum to boost the pound, the fact that the pound remains on the back-foot shows this is not being priced in as a realistic possibility right now.

Housebuilders to Struggle Following Disappointing House Price Data

The impact of Brexit on the housing market was exposed on Monday. Rightmove data showed that house prices declined for a second straight month in December. Brexit uncertainty combined with the seasonal Christmas slowdown saw UK house prices experience the biggest two-month fall since 2012. The sluggish housing market is unlikely to improve across the early months of 2019 as investors await clarity on Brexit. The UK housing market is clearly going nowhere fast as no deal Brexit fears have sucked any cheers out of any seasonal buying. The disappointing data and dismal outlook for housing prices amid Brexit uncertainty is expected to weigh on house building stocks in trading on Monday.

Euro in Focus as Italy Agrees Budget in EU limits

The euro will remain in focus on Monday as investors look towards Eurozone inflation data and digest reports of Italy finally coming to an agreement with the EU over its budget. After months of wrangling, Italy has softened its stance and agreed to produce a budget within limits that should please the EU. A small relief rally was evident in the euro in trading at the start of the week. Some well needed good news for the common currency after Draghi’s dovishness in the previous week.

Eurozone CPI is out later. Eurozone inflation is expected to tick lower to 2% in November, from 2.2% the previous month. Weakness in inflation, following Draghi’s acknowledgement of risks building to the downside in the eurozone economy, could keep the lid on any Italian budget relief rally.

Original post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.