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Morning Markets Report – Wednesday 12th January 2022

Major UK stocks were underpinned by domestic coronavirus hopes while a strong advance in commodity prices also underpinned the UK market. 

Rhetoric from Fed Chair Powell was slightly less hawkish than expected on a potential shrinking of the balance sheet. Risk appetite strengthened following Powell’s comments despite underlying Omicron uncertainty.

Wall Street equities posted net gains as market interest rate speculation was less frantic. US bond yields retreated from peak levels during the day.

The dollar lost ground following Powell’s comments with monetary tightening expectations scaled back slightly with the dollar index at 5-week lows. EUR/USD moved above 1.1350 despite mixed ECB rhetoric. Sterling held firm with GBP/USD with fresh 2-month highs above 1.3600.

Commodity currencies posted strong gains with higher oil prices and Band of Canada tightening expectations boosting the Canadian dollar.

Oil prices posted strong gains on hopes that demand would strengthen later in 2022. Precious metals were boosted by a weaker dollar and lower yields with gold above $1,800 per ounce.

Firm risk appetite helped sustain a recovery in bitcoin.

After a solid opening, Euro-zone equities were able to make headway on Tuesday despite mixed signals from central bank officials. There was underlying caution, but gains on Wall Street helped pull bourses higher.

Major UK stocks were underpinned by domestic coronavirus hopes while a strong advance in commodity prices also underpinned the UK market. Sterling was little changed and the FTSE 100 index gained 0.6%.

Wall Street stocks drew support from Fed Powell’s comments with a slight scaling back of interest rate expectations. Although there was caution ahead of the inflation data, the S&P 500 index posted a 0.9% gain.

US futures held firm on Wednesday and Asian markets made headway.

Japan’s Nikkei 225 index gained 1.9% with a 0.65% gain for the Australian ASX index as commodity prices held firm.

China’s Shanghai index closed 0.8% high with some relief over the inflation data while Hong Kong’s Hang Seng index traded 2.4% higher in late trading.

 

 

Stock to watch today

AstraZeneca continues to trade in a long term bullish channel. Yesterday we saw a close above the 10 day exponential moving average, as the shares outperformed the wider index. The shares have consolidated above the 50% Fibonacci support level at 8103p, which should provide a platform for further gain over the short to medium term. Further upside is expected from here.

 

CCM Opinion: BUY

Buy between 8375 – 8500p

Stop: 8175p

Target: 9450p

The value of shares can fall as well as rise; you may not get back the amount you invested. Past performance is no guarantee of future performance. Capital is invested at risk This document is published by Clear Capital Markets and does not constitute a solicitation or personal recommendation for the purchase or sale of investment. The investments referred to may not be suitable for all investors. Any data or views given should not be construed as investment advice. Every effort is made to ensure the accuracy of the information, but no assurance or warranties are given. Clear Capital Markets Limited is authorised and regulated by the Financial Conduct Authority FRN 706689.

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