Not that much to get excited about in Asian markets today, but with not much fresh news to go-on indices closed mixed. The Nikkei opened better after their long weekend but with other regional markets drifting weaker, the index did well just to close in the positive. Bank of Japan minutes released relatively smoothly with policy stance aligned. Shanghai-traded well closing up around +0.5% having traded weaker earlier in the morning session. Hang Seng finished almost unchanged but was a great performance having taken all day just to recover opening levels. Given the lack of direction in most indices, the safe-haven JPY found a bid late in the trading day. Having been playing north of 114 for most of the day, it took the final few hours to push it through 114 to trade back at mid 113’s. Oil started a positive move in the Asian session after the weekend’s news in Saudi. Markets were also vigilant for any Trump headline as the President tours the region.
After experiencing a dull day in Asia it was not a surprise we opened quiet in Europe. Core markets DAX and CAC were both small down with IBEX losing -0.4%. All core indices traded better as the day wore on but did see the UK’s FTSE outperform the core. However, having made recent fresh highs many were happy that indices could hold current high levels. These gains were aided by the economic data release (PMI better than forecast) but news of the failed merger between T-Mobile and Sprint. The IBEX returned some of the last week’s gains after the Catalan leader reported walked into Belgium police custody. Given the halt in stock direction and the uncertainty surrounding Catalan, we watched gold rally over 1% trading a little over $1280. Also, news out of Turkey that inflation had hit a 13 year high (11.8% in October) hit their CDS pricing (see below).
In the US markets, another day means yet more records set! Today we heard talk of further consolidation within markets players which has added another +0.2% to most indices. Oil prices have rallied even further in late US trading, taking today’s price rise to over 3%. Bonds have benefited on the back of the uncertainty and the flow of money finding its way into the US markets. The US Dollar index (DXY) continues to hold around recent highs even though it lost against GBP today.
2’s closed 1.61% (u/c), 10’s 2.32% (-3bp), 30’s 2.80% (-3bp), Bunds 0.33% (-4bp), France 0.72% (-4bp), Italy 1.77% (-2bp), Greece 5.02% (+3bp), Turkey 11.82% (+27bp), Portugal 2% (-7bp), Spain 1.46% (-1bp) and Gilts 1.25% (-1bp).
