Markets: Trade and politics remains at the forefront – Danske Bank

Global developed bond market yields rose during Europe's and in the US sessions supported by strong releases from the NFIB and JOLTS data, points out the research team at Danske Bank.

Key Quotes

“US small business optimism rose to the highest level on record (since the mid-1970s). High optimism is generally associated with positive business investment growth and supports our view that the US expansion continues. US equities rallied and the oil price increase fuelled rising yields further. Optimism on a neat Brexit continued ahead of the BoE and ECB meetings.”

“The Italian budget discussions by Italy's Finance Minister Giovanni Tria and Deputy Prime Minister Matteo Salvini sounded positive, fortifying latest commentaries about the expectation for a gradual implementation of reforms. Tria stated that the government wants to close the growth gap with the euro area but that deficit spending alone cannot do so.”

“The oil price continued to surge and Brent hit USD79.65/bbl, its highest since June, as Hurricane Florence advanced and US sanctions started weighing on Iran' s exports. API data revealed shrinking inventories in the US.”

“US President Donald Trump sounded optimistic on a NAFTA deal, stating that talks were going well. Canada' s Prime Minister Justin Trudeau said that while a good bargain was to be had, no deal was better than a bad one. Canada signalled it is ready for a small concession, allowing limited access to the Canadian dairy market.”

“Hungary's Prime Minister Viktor Orban sounded concerned about the EU's intentions to implement its strictest sanctions against the country for the erosion of democracy, possibly suspending its voting rights. The assembly needs a two-thirds majority to pass the sanctions.”