Key Shanghai Exchange and South Korean markets remain closed and was joined today by the Hang Seng market too. most of the focus centred upon Australia and the ASX and currency. Weaker than expected Sales data hit confidence and pushed the A$ through the recent 0.78 level to fall 1% on the day. With the currency taking the brunt of it the ASX closed small down with Retailers and Banks hit the most. In Japan the Nikkei returned strong early moves to close almost unchanged on the day. The Yen continues to play just under the 113 level but plays in a rather subdued Asian week.
Most of the market talk in Europe today again focused on Spain and BREXIT. Yet again headlines are swinging the IBEX in all directions as today we heard the Constitutional Court had suspended the planned Monday session. This news had a positive effect on the IBEX, which closed up 2.5% and helped produce a small recovery in 10yr Bono’s. It should be mentioned that despite this announcement it is heavily rumoured that it will still take place. In the UK the news remained negative as poor economic data (New Vehicle Sales) and the Tory now lagging in the polls after yesterdays fiasco at the Conservative Party Conference in Manchester. The FTSE closed up +0.5% but is marred by the 1.05% decline in the currency today.
Another day another record for US stocks as it rapidly approaches the key 23k target. Financials and IT companies helped gains, as investors tussle for yield. Data continues to assist the rally with Initial Claims, Deficit numbers and Factory Orders all lending a hand. Tomorrow it will be all eyes on the screens for the 1:30 (BST) NFP report where the consensus (100k) looks low after last months 156k print. Providing the booster into this hype is the fact that the currency is adding additional value. Having seen the DXY turn last month, we are seeing GBP, Euro, A$ and many EM currencies start to feel some pain.
2’s closed 1.49% (+2bp), 10’s 2.35% (+2bp), 30’s 2.89% (+2bp), Bunds 0.45% (u/c) pushes the spread 2bp wider to +191bp. France 0.73% (-1bp), Italy 2.14% (-4bp), Greece 5.48% (u/c), Turkey 10.74% (+1bp), Portugal 2.37% (-1bp), Spain 1.69% (-7bp), UK Gilts 1.38% (u/c).
