Market Talk- October 24, 2017

 

Having just seen an uncertain US session, Asia was a little confused which way to take markets from the opening bell. Still, it appears as though Shanghai and Hang Seng want to cancel each other out which a very much mixed session. The Nikkei had another strong day resulting in 16 days of consecutive gains. Retail participation was rumored to be pushing values better with banks (Mitsubishi and Mizuho around +1.5%) and exporters leading the run. The Yen was extremely well behaved but we do still have much to come to the balance of this week. With the impressive US performance late afternoon, we are seeing Asian futures follow suit and so are expecting a strong Asian opening.

Headlines for Spain were subdued, BREXIT more in the news after French PM Macron visited Ireland to discuss border arrangements. Even with the simmering news headlines the IBEX still traded briefly negative before closing up +0.4%. GBP was not so fortunate losing -0.6% to test the 1.31 handle. We will probably see a little more volatility tomorrow when we see Q3 GDP released for the UK. Expectations are around +0.3% (Q on Q) and anything less will make the 1.30 handle a target. We did see a Directional Change today so could well see a weaker print. The most positive news came in the form of US stocks (again), after more encouraging corporate results. We still wait with bated breath the ECB meeting and announcement due Thursday.

US markets opened with positive momentum as corporate numbers continue to beat expectation (Caterpillar and 3M) also raising future expectations. The DOW performed the best of the core rallying over 200 points (another record high) at one stage in the day. US PMI hit a nine-month high up at 55.7 for October. All markets really have been jumping on the back of the US indices but you should keep an eye on currency. As we see the move accelerate into the USD even a flat-line US market will benefit international investors via the exchange rate.

2’s closed 1.58% (+1bp), 10’s 2.41% (+4bp), 30’s 2.92% (+4bp), Bunds 0.47% (+4bp), France 0.88% (+5bp), Italy 2.04% (+5bp), Greece 5.45% (-2bp), Turkey 11.35% (+5bp), Portugal 2.28% (+2bp), Spain 1.65% (+4bp), Gilts 1.35% (+4bp).

A fairly calm day for core European bonds, as many now wait for the ECB’s next move. Peripherals will eagerly await Thursday’s announcement as any news of edging back will seriously impact current levels.

Latest Posts

Canada Created its Own Trade Barriers

Stéfane Marion, chief economist of the National Bank of Canada, has urged the Canadian government to reconsider their own trade barriers amid criticism of Donald Trump’s proposed tariffs. The International [...]
Read more

US Population Rapidly Growing

The population of the United States grew by 1% to 340.1 million in 2024, according to the US Census Bureau, marking the largest population increase since 2000. The nation has [...]
Read more

China Eyes Vacant VW Factories

Germany’s failing auto sector may prove to be an integral power play for China, as Chinese OEMs are eyeing soon-to-be vacant Volkswagen (VW) factories. Volkswagen plans to close at least [...]
Read more

Inflation Soars in Russia

Russia’s CPI reached 9.5% this December as government spending has pulled the reigns away from the central bank. Inflation elevated from 8.9% YoY in November to 9.5%, slightly below expectations [...]
Read more