Market Talk – December 22nd, 2017

Most core Asian indices finished in a positive note with KOPSI recovering some of yesterdays losses but also helped by a warmer rhetoric of language. The Hang Seng traded well following better Technology share performance, but these gains could arguably be reversed flowing BITCOIN price activity seen later in the trading day. Volumes were again of former-self so difficult to get too excited about the Asian session.

In the European markets, much of the talk surrounded BITCOIN and its price decline. Over the past week, we have seen a 40% decline from recent highs with many questioning. At its weakest level, BITCOIN was off nearly 50% from its high. Not really a surprise that limit down was hit, which sees a suspension of trading on the futures contract. The reasons behind this move have mostly been speculation but the last rumor heard was that because of the volatility pay-out would have to be delayed for five business days for security reasons. This upset the market even more and just accelerated the long liquidating. European core markets traded heavy after the separatist victory within the Catalan vote. The Spanish IBEX closed down 1.2% on the day, which actually was a result after it had opened down 1.55% lower. Spain’s large bank stocks all lost over 2% on the day. The DAX, CAC, and FTSE all closed around -0.25%. A good result for the FTSE after poor spending figures.

US markets edged lower but as you would expect, a quiet session. The market talk continued to focus on BITCOIN and today’s price decline. the Senate narrowly passed the Bill – well, at least until January 19th, 2018. Today’s economic data were weaker than expected and probably the reason why we could not close on a positive note today. The year has been an outstanding year for all key indices with encouraging set-ups for the New Year.

2’s closed 1.89% (+1bp), 10’s 2.49% (+1bp), 30’s 2.84% (u/c), Bunds 0.42% (+1bp), France 0.73% (u/c), Italy 1.90% (+1bp), Turkey 11.63% (-11bp), Portugal 1.77% (+5bp), Spain 1.45% (u/c), Gilts 1.24% (-2bp).