Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Opening Bell: Global Stocks Rally But USD Strength Shows Trade Fears Persist

By (Pinchas Cohen/ OverviewFeb 11, 2019 04:47AM ET
Opening Bell: Global Stocks Rally But USD Strength Shows Trade Fears Persist
By (Pinchas Cohen/   |  Feb 11, 2019 04:47AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
  • European equities leap on bank share gains, lower ECB capital requirements
  • China's stock climb boosts regional indices
  • Swiss franc flash crash provides signal of looming volatility
  • Gold gives in to dollar strength; WTI under pressure

Key Events

European stocks rallied along with futures on the S&P 500, Dow and NASDAQ 100 this morning, helped by a leap forward in Chinese stocks ahead of high-level trade talks in Beijing involving Chinese Vice Premier Liu He, U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer.

The STOXX 600 opened 0.19 percent higher, extended the advance to 0.39 percent in the first minute of trade and climbed above 0.78 percent within 35 minutes into the trading session. All sectors gained, with the banking index taking the lead, up over 1.3 percent. Investors responded positively to the new capital requirements unveiled by the European Central Bank for 2019.

Among the biggest gainers were Italy’s Banco BPM (MI:BAMI), UBI Banca (MI:UBI) and UniCredit (MI:CRDI), all up over 2 percent after the ECB reduced safety-buffer requirements for the three banks, which have been plagued by high-risk loans and a difficult recovery since the 2008 financial crash.

The European climb followed a choppy Asian session, which started off weakly as the market could not shake off fears of an economic slowdown amid warnings, by global policy makers, that the ongoing U.S.-China trade dispute is keeping a lid on growth. Also looming in the background is the threat of another U.S. government shut down, with Democrats ratcheting up impeachment talk against President Donald Trump.

Investors still managed to bid up China’s Shanghai Composite (+1.36 percent) to the highest level since December 4, pricing in a full week of closure as well as hopes for the upcoming round of trade talks. The Chinese rally spread optimism across the region, boosting Hong Kong’s Hang Seng (+0.71 percent) and South Korea’s KOSPI (+0.17 percent). Conversely, Australia’s S&P/ASX 200 inched lower (-0.18 percent) after a Royal Commission inquiry ended with strong criticism of the financial sector’s widespread misconduct. Japan’s Nikkei 225 was closed for a holiday.

U.S., Germany and China Sovereign Bonds Hourly Chart
U.S., Germany and China Sovereign Bonds Hourly Chart

Meanwhile, the global bond market has been providing conflicting signals, with U.S. and European yields edging higher and Asian bonds jumping. While the rise in U.S. and European yields demonstrates a risk-on mood, the surge in Asian bonds suggests that investors are hedging against another market rout.

Global Financial Affairs

On Friday, U.S. stocks closed slightly higher after a lackluster week. A last-minute tech rally—prompted by earnings beats for the likes of Expedia (NASDAQ:EXPE) and networking equipment maker Ubiquiti Networks (NASDAQ:UBNT)—allowed the Dow Jones Industrial Average and NASDAQ Composite to seal their seventh straight weekly gain, in the longest winning streak since September.

Company profits partly offset worries of an economic slowdown, after the RBA cut its GDP and inflation growth expectations last week, joining European and U.K. policymakers in warning against downside risk and a lower outlook for growth. The Bank of England cut its growth forecast for the year to 1.2 percent last Thursday—the lowest level since 2009.

U.S. Treasurys, the dollar and gold support the view of an economic slowdown.

DXY Daily Chart
DXY Daily Chart

The greenback climbed for the eighth straight session with Treasury yields, extending the longest rally since Trump’s presidential victory in November 2016. It reached the highest level since January 2. Technically, it reversed to an uptrend in the short term.

GBP Daily Chart
GBP Daily Chart

The pound weakened as U.K. premier Theresa May was looking to buy more time to renegotiate her Brexit agreement. Technically, sterling fell back into a descending channel since September, as the price is squeezed between the major MAs, suggesting an explosive breakout.

CHF 1-Minute Chart
CHF 1-Minute Chart

The Swiss franc plunged almost a whole percentage point at the beginning of the Asian session, though it pared some losses later in the session. Such flash crashes have historically occurred ahead of major market moves.

XAU Daily Chart
XAU Daily Chart

Gold seemed to finally give in to USD strength, as well as to the momentary risk-on in equity markets, sliding below $1,309. Technically, it found support above a possible falling flag, bullish in an uptrend.

WTI kept falling toward $52 a barrel, stifled by ongoing stalemates in Venezuela and the U.S.-China trade war.

Overall, while U.S. equities have managed to hold onto weekly gains, investors are losing heart, as global policymakers reinforced a broad pessimistic outlook on growth, which continues to threaten the longest bull stock market on record.

Meanwhile, traders are holding their breath ahead of the March 1 deadline that would unleash hefty tariffs on Chinese exports. Exacerbating global growth concerns is also the view, voiced by Fed Chair Jerome Powell during the last monetary policy meeting's press conference, that another U.S. government shutdown would most likely impact growth, as it would hurt confidence.

Up Ahead

  • Sweden’s Riksbank is expected to keep interest rates at minus 0.25 percent on Wednesday after the first increase in more than seven years in December.
  • Data on Wednesday is expected to show U.S. consumer prices rose 0.1 percent in January, after falling 0.1 percent in December. If no deal is reached on the U.S-Mexico border wall, some units of the federal U.S. government may shut down again later this week when the stopgap government funding expires.


While most of the biggest earnings results of the season have already been published, some reports coming out this week could still impact the broader market:

  • Cisco (NASDAQ:CSCO) is due to report earnings on Wednesday after market close, with expectations for a $0.65 EPS, up from the $0.58 posted for the same quarter last year.
  • Coca-Cola (NYSE:KO) is scheduled to report corporate results on Thursday before market open, with an EPS of $0.43, slightly higher than the $0.39 posted for the corresponding quarter last year.

Market Moves


  • The Shanghai Composite surged 1.36 percent, hitting the highest in almost 10 weeks with the first advance in more than a week and the largest jump in more than three weeks.
  • The MSCI Asia Pacific Index rose less than 0.05 percent.
  • The MSCI World Index of developed countries gained 0.1 percent.


  • The Dollar Index climbed 0.1 percent to 96.73, for an eight session and a total advance of 1.46 percent.
  • The euro slipped less than 0.05 percent to $1.132.
  • The Swiss franc fell less than 0.05 percent.
  • The Japanese yen dropped 0.2 percent to the weakest in more than six weeks on the largest fall in a week.
  • The onshore yuan declined 0.6 percent to 6.777 per dollar and the biggest decrease in more than a week.


  • The yield on 10-year Treasuries rose one basis point to 2.64 percent, the first advance in a week.
  • Germany’s 10-year yield increased one basis point to 0.10 percent, the first advance in a week.
  • Italy’s 10-year yield gained two basis points to 2.983 percent, hitting the highest in two months with its fifth consecutive advance.


  • Gold fell 0.3 percent to $1,310.94 an ounce.
  • West Texas Intermediate crude slid 1.3 percent to $52.05 a barrel.
  • LME nickel fell 0.3 percent to $12,530 per metric ton.
  • LME copper lost 1.1 percent to $6,140.00 per metric ton.
Opening Bell: Global Stocks Rally But USD Strength Shows Trade Fears Persist

Related Articles

Ashraf Laidi
The Half Of Growth By Ashraf Laidi - Jul 01, 2022 2

The final week of the month and the quarter is delivering its share of negative US economic surprise, to the extent of moving growth worries nearer to inflation fears—at least in...

Opening Bell: Global Stocks Rally But USD Strength Shows Trade Fears Persist

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Darsim Bewok
Darsim Bewok Feb 11, 2019 9:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
nd100 buy wath sell
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email