Market Talk – May 29th, 2017

Many markets were closed today and so volumes are traditionally low. Another test missile over the weekend rattled markets initially but the lack of follow-through soon saw nerves settle. The Nikkei finished more-or-less flat with the JPY safe-haven bid failed to materialize. the currency continues to play around the mid-111’s but has plenty of data and news to heat things up later in the week. Oil was weaker initially but saw renewed confidence later in the day trading around the $50 level. The ASX lost ground throughout the day closing at the sessions low. Commodity prices continue to damage both the A$ and equity markets in todays trading. China’s Shanghai market closed for public holiday.

European markets were also quiet but saw the DAX close better (+0.2%) whilst declines were seen for CAC, FTSE MIB and IBEX. Much discussions were had over the weekend following German Chancellor Angela Markel’s comment sighting that Europe should take our destiny in our own hands, adding – we have to fight for our own future ourselves. Germany is in election mode and so comments were targeted both international and domestically. Not really a surprise then after the German Finance Minister Schaeuble calls for European Defence Union. In Italy the banks were again the centre of attention as talks and reports of new strategic vision peppered screens. The market remains concerned about the health of many Italian banks and as a result we saw a 2% decline overall and BPM and Unicredit fall 4%.

2’s closed 1.29%, 10’s 2.25%, 30’s 2.91%. Germany 0.29%, France 0.73%, Italy 2.17%, Greece 5.86%, Turkey 10.34%, Portugal 3.10% and Gilts 1.01%.

More talk that the big buyer was in again today. Full markets back open tomorrow… Will show spread performance then.