Trading. Inspired.


Bespoke trading conditions and solutions for the discerning trader.


Trade CFDs on Bitcoin, Ethereum and Litecoin
using the STO Crypto Account


Trade with Top-Tier Conditions

12 EAs & 15 Chart Indicators are now offered for Free
with our VIP, PRO & Premium Accounts


Trade CFD Indices


Trade on Today’s Most Active Indices


Trade on the most active shares on the
Italian, German and U.S. Markets

Over 100 CFDs with a commission charge 2 cents per share


The STO VIP Experience


Trading. Inspired.


Bespoke trading conditions and solutions for the discerning trader.


Regulated

FCA

Spreads from

0.0 pips

Leverage

up to 1:500

CFD asset classes

7

Negative balance
protection

LATEST MARKET NEWS

Fundamental Analysis 19.06.2018 – Market Outlook
With little data out, the market is focused on the growing “trade war” between the US and China. Shortly after the US Senate passed a bill with an amendment that would kill US President Donald Trump’s rescue of Chinese telecom firm ZTE, Donald Trump directed the US Trade Representative to identify $200bn of Chinese goods for additional 10% tariffs. Needless to say, China has threatened to retaliate with “comprehensive measures” if the US goes ahead with this plan. China-related stocks are down sharply this morning, e.g. the CSI 300 -2.85% and the Shenzhen Composite -4.35%. The S&P 500 held up fairly well yesterday (-0.2%) but the futures were trading -0.9% this morning.

Clearly it’s a risk-off environment. Against that background, it’s no surprise that the commodity currencies did badly and the “safe haven” JPY and CHF did well. AUD was particularly hard hit, for two reasons:  first off, it’s often traded as a more free-floating proxy for CNY, and secondly, Australia’s economy would be hardest hit by a slowdown in the Chinese economy. USD fell, as is to be expected in a trade war that’s likely to take an increasing toll on the US economy (see Mr. Bostic’s comments below).

So far the “trade war” has been confined to trade. The fear however is that it may spill over into the financial world. Specifically, China could start selling off some of its massive holdings of Treasury bonds. The country owns some $1.18tn of Treasuries, or 30% of all foreign official holdings of Treasuries, which is not to mention their holdings of agency bonds and others.




Of course to some degree it would be shooting themselves in the foot to sell these bonds aggressively, because once the market realized what was happening, bond prices would plunge. However, US mortgage rates would soar as a result, and China might feel the pain was worth it to make middle-class US voters sit up and take notice.




Would that be good or bad for the dollar? Oddly enough, it might be good for the dollar. As you can see, in general USD has risen and fallen along with US yields over the past several years.



We had some interesting Fedspeak yesterday, with two voting members presenting quite different assessments of the outlook.

Atlanta Federal Reserve System (Fed) President Raphael Bostic said, “I began the year with a decided upside tilt to my risk profile for growth, reflecting business optimism following the passage of tax reform. However, that optimism has almost completely faded, replaced by concerns about trade policy and tariffs. In contrast, incoming NY Fed President John Williams said, “Our economy’s in great shape; we’re in the second-longest expansion in history,and economic data from both the United States and countries around the world continue to trend upwards.” So a mixed view on the FOMC.

Today’s market

A relatively quiet schedule today.

In Europe, European Central Bank (ECB) President Draghi will be giving the opening speech at the ECB’s forum in Sintra, Portugal on Price and wage-setting in advanced economies. His speech is to last 30 minutes. Then, ECB Chief Economist Peter Praet will chair the first session, on Macroeconomics of price and wage setting. Participants include St. Louis Fed President James Bullard. They break for lunch at 13:30 local time and that’s it for the day.

The only major data out from the US today is housing starts and building permits. The market is looking for a 1.9% mom increase in starts, a rebound from the fall in the previous month, but a 1.0% mom decrease in permits. A fall in permits of that degree wouldn’t be particularly worrisome though as the upward trend seems to be still in place. This could be positive for USD.



Overnight, New Zealand announces its current account balance for Q1. It’s expected to be slightly in surplus. However, the 4-quarter calculation of the current account as a percent of GDP will show a slightly wider deficit, because the Q1 2017 surplus, which now falls out of the calculation, was a bit larger than the Q1.



Early in the European day Wednesday 20th of June 2018, Bank of France Governor and ECB Board Member Villeroy de Galhau will hold a press conference on the Annual Report of the Banque de France. According to Google Translate, he’ll talk about the economic situation of France and the Eurozone. We might get more insights into the ECB’s recent decision.

The Fundamental Analysis is provided by Marshall Gittler who is an external service provider of Claws and Horns (Cyprus) Limited, an independent analytical company. Any views and opinions expressed are explicitly those of the writer. Any information contained in the article, is believed to be reliable, and has not been verified by STO and is not guaranteed to be accurate. References to specific products, are for illustrative purposes only and are not a form of solicitation, recommendation or investment advice. Past performance is not a guarantee of future performance.
...
Read More

TRADE NOW

Start trading on 7 CFD Asset Classes now.


View full terms and conditions

Tight spreads

Tight, reliable and transparent spreads on a multitude of highly mobile markets, forex from 0.0 pips, indices from 0.5 points and oils from 4 points.

Trade Everywhere

Use the industry preferred MT4 platform to trade anywhere, anytime on mobile or desktop.

Full Suite of Education Tools

No matter what level trader you are STO offers you access to expertly created education materials to master advanced concepts, strategies and various types of trading.

Trade Confidently with a Regulated Broker

STO is a fully regulated and registered broker ensuring you can trade confidently no matter what market, CFD instrument or account you choose to trade with. We offer Negative Balance Protection - Segregated Client Account, including Barclays UK.

FX and CFD trading are high risk and may not be suitable for everyone, ensure you fully understand the risks. You may sustain a loss of some or all of your invested capital.You may sustain a loss of some or all of your invested capital

TRADE NOW RISK FREE DEMO