ASIC follows FCA in limiting leveraged trading

The Australian financial services regulator ASIC have announced that they will now be following the FCA in limiting certain aspects of CFD trading, which will impact its regulated brokers.

The move comes as the regulator hopes to protect retail traders, who they believe may be “ill equipped” to trade on higher levels of leverage.

Many now expect traders which are affected to seek new brokers regulated in other jurisdictions like Tradeview Markets, who will still be able to offer what had been considered industry standard levels of leverage to retail clients.

In confirming the changes, which will commence March of 2021, ASIC released its new leverage levels.

Max Leverage for retail traders:

  • 30:1 for CFDs referencing an exchange rate for a major currency pair
  • 20:1 for CFDs referencing an exchange rate for a minor currency pair, gold or a major stock market index
  • 10:1 for CFDs referencing a commodity (other than gold) or a minor stock market index
  • 2:1 for CFDs referencing crypto assets
  • 5:1 for CFDs referencing shares or other assets

Stocks sink as COVID-19 fears grow

Stock markets across the globe fell on Wednesday as fears of a second wave of coronavirus cases dented investor confidence.

In the United States the number of new daily cases has surpassed 80,000 in recent days, and as such, sent the one-week average to a new high of close to 69,000, which is substantially above the numbers seen during the peak of the first wave.

As a result of the numbers and growing concerns, heading into the close the Dow Jones had fallen close to 3.4%, the S&P 500 lost around 2.95%, whilst the NASDAQ declined by 3.7% also. These drops came despite news that exports of goods in the U.S. rose by 2.7% to $122 billion.

ECB expected to keep rates unchanged

Recent selloffs in European stocks have pushed markets to their lowest levels since the height of the COVID-19 outbreak.

This comes as a rise in coronavirus infections have led to many European nations pondering new national lockdowns. Germany has followed France in moving to shut down, with Angela Merkel confirming a four-week lockdown will commence from Monday.

The Dax in Germany dropped 4.17% to its lowest level since the end of May. The CAC 40 in France dropped by 3.37%, whilst the FTSE 100 in London fell 2.55%.

Quote of the day – “Sheer will, and determination is no substitute for something that actually works.”

Jason Klatt – #TradeWithCoach USA Political Update – for Oct. 28

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Eliman Dambel

Senior Market Analyst