Asia was very happy to see the US markets rally yesterday and responded with a strong performance themselves. News that the fear of trade wars may have faded helped sentiment and confidence. The Nikkei and the Hang Seng both added 2% which also pushed the Yen back out to the mid 106’s. This currency move helped rescue the exporters recover much of the recent days losses. Todays renewed confidence was onlu just enough to keep the SENSEX [positive but was hit in the final hour when talk of international money leaving seemed to accelerate. The KOPSI, ASX and Shanghai all managed 1% but lets skip through the day because the news that is moving markets is currently the European and US sessions.
Europe was a little nervous as it dawned on many that it was Italy’s turn to show their dissatisfaction with the European Union. Interesting though that the FTSE MIB closed almost 2% firmer on the day! We still await clarity from the Italian talks but can be sure this is a storey that will move markets upon release. Having spent much of the day in the black it was another US headline that shook European confidence. Talk late in their day that Gary Cohen, President Trumps Chief Economic Advisor, would resign if the proposed tariff plan were to be implemented. This took much of the advances away from European indices even forcing some core markets back to unchanged.
Between the headlines of Trade Wars, Cohen walking and North Korea talking core US indices showed no clear path. The DOW whipped in a 300 point range whilst the broader S+P and NASDAQ held reasonably steady managing to regain early losses. Volumes were lighter today but we do have some data tomorrow which may provide some badly needed direction. A quiet market but worth being mindful of the fact that the Russell 2k finished up over 1% with large cap’s almost unchanged.
Japan 0.055%, US 2’s closed 2.23% (-1bp), 10’s closed 2.87% (-1bp), 30’s at 3.13% (-2bp), Bunds 0.68% (+3bp), France 0.94% (+1bp), Italy 2.09% (-1bp), Greece 4.30% (-2bp), Turkey 11.72% (+8bp), Portugal 1.92% (-1bp), Spain 1.48% (u/c), and Gilts 1.52% (+3bp).