Market News & Analysis


Top Story

Pound Weakness and Trade Optimism Lifts FTSE

FTSE has kicked off trading on the front foot amid growing optimism over the signing of the US -China phase one trade deal on 15th January and on the back of a weaker pound, pushing below $1.30.

UK economy contracts
The pound was already softer heading into the new week. However, dismal GDP data has since fuelled the selloff in sterling. GDP printed at -0.3% in November, well below October's 0% and short of expectations, as manufacturing proved to be the biggest drag on the economy. Following Mark Carney’s dovish comments at the end of last week pound traders are upping bets of a rate cut from the central bank. With no further clarity on a Brexit due for many months, the outlook for 2020 looks weak at best and a recession in the UK shouldn't be ruled out.

Trade deal optimism
This week’s signing of the US – China trade deal has boosted sentiment across the globe. Investors will pour over the 86-page document for more details on the deal.  Traders will be keen to understand the next steps for phase two, although Trump has already said that this could be after the US elections. 
Geopolitical risk between US and Iran has eased helping boost the mod towards riskier assets. After 6% losses across the previous week, crude oil is consolidating losses below $60 per barrel.

Levels to watch: 
The FTSE is up 0.5% at 7630, approaching its 5-month high. Trading above its 50, 100 and 200 sma to chart is clearly bullish.
Resistance can be seen at 7676 (Dec 27th high), before opening the door to 7730 (July 30th high).
On the downside support stands at 7450 (Jan 8th low) prior to 7408 (50 sma).


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.