Market Talk – April 28th, 2017

After the US closed we saw yet more encouraging results from the likes of Alphabet (Google parent) and Amazon (+4% futures) which has boosted confidence into the Asian session. However, that run did not last long as comments from President Trump concerning North Korea certainly unnerved markets resulting in a mixed close for month end. Yen traded in a narrow range but played for most of the day with a 111 handle eventually closing for the week and month 111.55.

Europe had plenty of banking results along with economic data which saw markets play in an orderly manner but for Barclays. RBS and UBS and Caixabank all reported better than expected and saw shares higher by between 2% – 5%. Barclays however, reported better than forecast results but had underperformed on the Fixed-Income Floor; a move that will be hotly debated internally especially following job losses earlier in the year. Barclays shares closed almost 5% lower on the day. European inflation numbers were better than expected (1.9% versus 1.6% previous) while in the UK inflation data missed forecast releasing at 0.3% despite an estimated 0.4%. It has been a good couple of weeks for the EURO closing just under the 110 handle but at five month highs.

GDP was also released in the US but failed to meet market expectations. The market had been looking for 1.1% growth and so were disappointed with a 0.7% release – a 3yr low. The Trump administration have been branding a 4% growth expectant forecast for a few weeks and so today’s number will be a huge disappointment all around. Month end so still lots to play for in May not least we see US unemployment numbers next Friday, but we have seen a great move for the Russell even though it lost over 1% in todays trading having made intraday contract highs..

2’s closed 1.26% (+1bp), 10’s closed at 2.28% (-1bp), Bunds 0.31% (+2bp) closing the US/Germany spread at +197bp (-3bp). France 0.83% (+1bp), Italy 2.27% (+4bp), Greece 6.16% (-8bp), Turkey 10.21% (+12bp), Portugal 3.50% (+9bp) and finally Gilts 1.08% (+2bp).