Market Talk – June 22nd, 2017

The oil price to continues to unsettle markets and had a particularly heavy influence on European markets yesterday. US held in well but Asia looks to be turning over as we progress through the week. The ASX bounced (+0.7%) from yesterdays lows as the AUD played around unchanged levels (0.755), even as the NZD continued its positive trend when New Zealand left rates unchanged. The Nikkei closed only small lower (-0.1%) as we watched the JPY hold the 111 area and trade back towards mid 111.50. Volumes were thin in almost all core markets with many happy to stick with core positions.

A quiet session also for Europe with closes at the end of the day +/- 0.2% across the board. GBP did manage to hold onto its late gains of yesterday and has even managed to push a little higher by close of US trading. Although energy prices managed a flat session, after recent losses, energy shares remained under pressure as talk is even long term holders have had a change of mind. It is probably not a surprise when you look at the YTD numbers as oil has lost near 20% YTD. The core tendency continues to be BREXIT but then we would guess that’s probably going to be the case for the next two years! Theresa May did confirm today that EU citizen living in the UK can remain after BREXIT talks have completed.

The talk for US markets centred around the Healthcare Bill that is close to being voted on. This is helping some core health care stocks seen mostly in the DOW. Also talk late in the afternoon that Qatar Airways is looking at purchasing a 10% stake in US Air which helped their shares rise almost 1% in todays trading. To close the week we will see Manufacturing, New Home Sales and a few FED speakers throughout the afternoon session.

2’s closed 1.34% (-1bp), 10’s 2.15% (-1bp), 30’s 2.72% (-1bp), Bunds 0.25% (-1bp) which closes the spread unchanged at +190bp. France 0.6% (u/c), Italy 1.89% (u/c), Greece 5.45% (+1bp), Turkey 10.13% (-4bp), Portugal 2.89% (+3bp) and Gilts 1.02% (-1bp).