Market Brief: Pound soars and stocks rebound

A summary of news and snapshot of moves ahead of the US session.

  • Market update at 13:20 GMT: the GBP was easily the strongest currency while the AUD and USD brought up the rear. European stocks and US index futures were rebounding sharply, although the FTSE underperformed, hurt once again by a stronger pound. Crude oil was up along with risk assets ahead of oil inventories today and OPEC meeting tomorrow. Gold was supported by a weaker dollar, although the gains were kept in check due in part to rebounding equity prices.

View our guide on how to interpret the FX Dashboard

  • GBP as expectations grow that the Tories will win the majority of the votes in the upcoming election. AUD fell after a sharp two-day rally when it was supported by stronger Chinese manufacturing PMI data. It was hit as growth data showed Australia’s GDP missed expectations at 0.4% Q/Q vs. 0.5% expected. USD was hurt by the ADP employment report showing jobs growth was much weaker in November than expected.
  • Services PMI recap: Final services PMIs were revised higher for the Eurozone (to 51.9 from 51.5), Germany (to 51.7 from 51.3) and UK (49.3 from 48.6), but lower for France (to 52.2 from 52.9). Separately, flash services PMIs showed Spain beat (at 53.2 vs. 51.9) and Italy disappointed expectations (at 50.4 vs. 51.2 eyed). Overnight, China’s Caixin services PMI topped expectations at 53.5 compared with 51.1 expected and last.  
  • Stocks: Sentiment towards risk turned positive after a report by Bloomberg suggested that the phase 1 trade deal between the US and China was actually much closer than thought, and that it could be signed by December 15 tariffs deadline. Today’s gains for stocks come after a sharp two-day sell-off, triggered by concerns that a trade deal was not imminent. On Tuesday, it was Donald Trump himself who surprised the markets by saying a trade deal with China could wait until after the 2020 presidential election in November. It remains to be seen whether the gains can be sustained though, given that Bloomberg’s source was “unidentified.” What’s more, the US has imposed fresh tariffs on Argentina and Brazil exports of metals, while Trump has threatened to impose duties on French goods. On top of this, China has warned that the US bill calling for a tougher US response to Beijing's treatment of its Uighur Muslim minority will impact bilateral cooperation. So there are plenty of reasons why trade jitters could escalate.

  • Coming up:




From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.