Market Talk – May 30th, 2017

It seemed lifeless in Asian trading today as China markets remained closed and the Nikkei hardly moved. Given the stronger than expected Japanese Retails Sales (3.2% against a forecast 2.3%) it is surprise to see the JPY trading back below the 111 figure in European trading. There was much Talk surrounding the MAS (Monetary Authority of Singapore) fining both Credit Suisse and UOB (United Overseas Bank). Both were fined for breaches of anti-money laundering requirements. Comments were also made involving two Swiss banks BSI and Falcon Bank, there were eight banks in all. Individuals were also barred from the Singapore financial industry ahead of today’s final judgement.

All core European markets traded weaker today as concerns over the energy price decline, Draghi’s comments surrounding continued extreme monetary conditions and the upcoming Italian elections. All combined to unsettle sentiment combined with volume and trading levels drifting lower every day but especially as dealers attempt to reason with the oil price decline. Monday evenings TV debate between Jeremy Corbin and Theresa May failed to produce many sparks but talk was that Corbin produced a slightly better performance than May. Having watched the debate I am struggling to support main stream conclusions expressed today, but I guess that’s what makes a market! DAX and FTSE closed -0.3%, CAC -0.5% and FTSE MIB just small down.

After the long weekend US stocks drifted in equally lifeless trend and volume. Tweets by US president Trump towards Germany was a hot topic in early trade but has reversed any trades in after hours trading after it was announced talks towards a “Mega” trade deal by Wilbur Ross. Overall, the market was dragged lower as oil continues to drift and was joined as bank stocks weighed on sentiment. For the rest of the week we have a host of economic data with PMI, Home Sales and Beige Book coupled with FED speakers, then more Thursday and finishing Friday with Non-Farm Payrolls.

 2’s closed 1.28% (-1bp), 10’s at 2.21% (-4bp), 30’s at 2.88% (-3bp) and Germany 0.29% (u/c); this closes US/Bunds at +196bp (-4bp). France 0.72% (-1bp), Italy 2.16% (-1bp), Greece 5.92% (+6bp), Turkey 10.28%. Portugal 3.07% (-3bp) and Gilts 0.99% (-2bp).