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Market Talk- April 11, 2018

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The US did lose around a third of its gains in the final hour of trading Tuesday, but it still closed strong. It was that confidence that carried some of the markets in Asia forward but there were some that were not convinced. The Australian ASX, SENSEX and Nikkei looked hesitant and took time to settle. The SENSEX was finally the only one of the three to follow and finally push higher. ASX and Nikkei faltered mid-session with values trading down for the rest of the day. Both the Yen and A$ traded better which is probably the balance for the weaker indices. The INR however, has reversed recent gains and looks to be heading weaker for the foreseeable future, which will support the SENSEX for the moment. China’s markets have performed well since president Xi acknowledged the gradual opening of the domestic markets. Again today we saw gains for both Shanghai and the Hang Seng returning +0.5% the pair.

Europe did not trade well today with prices hit on every bounce. Closing on the lows of the day, both the DAX and CAC both lost around -0.7%. Tensions surrounding US President Trumps Syria tweets did not bode well for European equities as tensions surrounding a possible escalating conflict scares markets. We continue to see tech and energy stocks performing for the second day in a row, with a 2% gain to add to yesterdays 3% run. We do have the FED minutes later this evening, but it will need to be something very positive the turn European bourses as the level of fresh enthusiasm seems incredibly low. Volumes for stocks, bond and even FX markets have been a fraction of the norm.

US futures were already trading lower before president Trump tweeted his remarks. Obviously, the comment did help stocks but then the more bazar the tweet the less impact they receive. Volumes trading in the US markets are still a concern to many and even the VIX appears to have run out of excuses the run. Markets remain above their 52 week average in price if not in volume. FED minutes just showed that all members expected US economy to grow at a steady pace. Interesting as they admit they are confused as to why unemployment is so low yet there is still no inflation.

Japan 0.025, US 2’s closed 2.30% (u/c), 10’s closed 2.78% (-2bp), 30’s 3% (-2bp), Bunds 0.49% (-2bp), France 0.73% (-2bp), Italy 1.80% (+1bp), Greece 4.05% (+3bp), Turkey 12.85% (-14bp), Portugal 1.68% (-2bp), Spain 1.25% (+1bp), and Gilts 1.39% (-1bp).