Market Talk- September 1st, 2017

Think we should just probably forget the Asian session as all were waiting for the US numbers and hoping for some direction as a result. mixed cash session but we are seeing some positive moves in futures following the US numbers. Europe sees the core perform (CAC and DAX both around 1% better) while the UK’s FTSE and Spain’s IBEX manage just +0.4% the pair. The 156k headline number was a huge disappointment for many especially as expectations were north of 180k. The UK Manufacturing number was better than expected (+56.9) which is possibly the reason why sterling has traded well today, complementing the FTSE rally. The Euro has not been as fortunate, drifting into the European close -0.35%. The JPY also lost ground upon the numbers release and has taken us back to the comfort zone of mid 110’s.

US markets feel as though they are toiling with the idea of rates lower for longer and the release of stronger data earlier in the week. The DXY certainly looks as though it is happy holding its ground but then all core stock indices have also shown recent steadiness. After the wobble we saw late last week and earlier this, they appear to have settled – for the moment! We should mention again that volumes are incredibly low still which provides a false impression of the percentage moves. A lot of cheering as the DOW breaches the 22k market but it has been the slow-coach compared to the S+P and NASDAQ’s performance. Mid afternoon we saw conflicting reports from construction spending and factory activity, so can’t really draw a conclusion from those. We did drift back from early highs with core, currency, bonds and even gold fading into the weekend’s close. The treasury market also drifted as we approached the weekend especially as most are still concerned of weekend headlines. Dow eased from the highs to close just 39 points higher with the S+P also giving back much to close 4points better.

2’s closed 1.34% (+1bp), 10’s closed 2.17% (+4bp), 30’s 2.78% (+4bp), Bunds 0.37% (-1bp), France 0.68% (+1bp), Italy 2.07% (-2bp), Greece 5.43% (-1bp), Turkey 10.35% (u/c), Portugal 2.78% (-4bp) and UK Gilts 1.05% (+1bp).

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