Posted Dec 11, 2017 by Martin Armstrong
A strong session from Asia to open the week with Hang Seng and Shanghai both higher by 1%. Having seen a brief wobble at the start of trading, the move was quickly rejected and we traded from strength to strength. Energy, Tech and Financials were the leaders for the day with volumes actually increasing slightly in what is probably fair to say the last busy week of the year. With three Central Banks announcing this week it is generally felt that only the FED will move on rates. Much of todays moves were the reaction to Fridays jobs report, but there is a little hype surrounding the BITCOIN futures contract; which continues to play in a world of its own. The Nikkei also managed a 0.6% rally today with Financials another leader. Todays move hit a fresh 25-year high, whilst saw the Yen comfortably trading mid 113 range. This trend looks to want to continue with better stocks off-setting a weaker currency.
European markets were not so joyous as the Asian session even closing down on the day. FTSE was the only core market to finish in positive territory, but even that was probably because of the decline seen in Sterling. The FTSE closed down -0.8% whilst cable was last seen down -0.5%. Bothe the DAX and CAC small lower with losses in Telco’s, Industrials and Utilities. UK press has been interesting reading of Theresa May’s compromise with claims of “a statement of intent” and not really a legal binding. Will be interesting to see how that plays out, especially once they start the trade negotiations stage. Not a good sign for either party really!
The terrorist scare early session was fortunately dismissed early, but did manage to bring the market back from their highs. The mood remains positive even as we approach Central Banks and the festive season. The end of this week is traditionally the end of volume trades, which will make it a little tricky this year as volumes are already light! Much of the talk today has centred on BITCOIN and the launch of the new futures contract. Oil has had a good day up around 1% but the same can not be said for gold which currently trades on support. The trend remain lower for gold into year end.
2’s closed 1.82% (+3bp), 10’s 2.38% (u/c), 30’s 2.77% (u/c), Bunds 0.29% (-1bp), France 0.62% (u/c), Italy 1.64% (u/c), Greece 4.42% (-1bp), Turkey 11.66% (-1bp), Portugal 1.76% (-1bp), Spain 1.40% (+1bp) and Gilts 1.20 (-8bp).