Market Talk- January 18, 2018
|The Nikkei reached another 26yr high in early trading, but unfortunately closed down on the day. Ending the day down -0.4% even with the Yen trading lower also (111.20 last seen). Financials and real-estate led the market lower in the afternoon session. Worth a quick mention is that TOPIX lost -0.7% on the day having seen a health rally recently. Shanghai and Hang Seng saw some encouraging price action with a near 1% gain for Shanghai and +0.4% advance for the HSI. China saw its best close in almost two years and was quickly justified with today economic data released after the close. The forecast for todays release was 6.5% but actually released at 6.9%. SENSEX opened strong and despite a brief sell-off just ahead of the close still managed to advance +0.5% on the day.
Bundesbank President, Jens Weidmann, defended the German economic surplus today despite criticism from the IMF’s Christine Lagarde. Suggesting Germany allocates more money to reforms to boost the long term growth potential. We will hear this weekend whether a government is to be formed between SDP and Conservatives. New elections will need to be called if this is not to be the case. The DAX is obviously optimistic closing today +0.75%, whilst the CAC closed almost unchanged. FTSE lost ground (-0.3%) probably on talk that UK PM Theresa May is rumoured to have offered financial support to France in securing the boarders. We continue to see strong rally in both Euro and GBP as concerns mount of a possible US government shutdown. Oil prices tending to drift over much talk about the possible flood from US Shale producers.
US indices traded heavier today but probably not a surprise after yesterdays fun and games. Although the DOW did see a 170 point decline mid morning, prices have been relatively well behaved in afternoon trading. Both the S+P and NASDAQ played around midday for much of the days volume. Into the close and continuing fears of a possible government shutdown the DOW closes down 100 points. They will need to pass a spending bill before midnight Friday to halt the process.
Japan 0.079% (-0.004bp), US 2’s closed 2.05% (+1bp), 10’s 2.62% (+6bp), 30’s 2.90% (+7bp), Bunds 0.595% (+2.5bp), France 0.85% (+1bp), Italy 1.98% (-1bp), Greece 3.74% (+4bp), Turkey 11.73% (-4bp), Portugal 1.99% (-2bp), Spain 1.47% (-1bp), and Gilts 1.34% (+3bp).
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