Market Talk- March 29, 2018

The end of the week, month and quarter for many so this weekend numbers will be very closely watched. the Nikkei recovered 0.6% but the currency probably found more conversation than stocks after it traded back to a 107 handle before climbing again in US trading hours. The encouraging news of talks between China and North Korea was met, understandably, with a very positive response around the globe. Tech stocks had been beaten enough this week and so saw a much needed bounce today. Quarter end probably helped but of course we still have concerns over possibly trade frictions. Shanghai performed most with a +1.25% rally with Hang Seng adding just 0.25%. Indian stocks were quiet with parts of the country taking holidays. SENSEX drifted in light volume closing with small loss of -0.6%. INR remains vulnerable and was last seen trading a tad weaker around the 65.20 level.

A much welcomed Thursday rally in an attempt to patch a very poor Q1 for European indices. Todays rally in the DAX may look impressive (+1.3%), but still remains down -6.35% on the quarter. The CAC did a little better closing off just -2.75% for the YTD, but that was after a +0.75% return today. Auto’s did well in todays trading with financials weighing for much of the session. Even with the rally in stocks we continue to see bond yields edge lower, with 10yr Bunds now 0.49%. UK Current Acct deficit didn’t help Sterling today and we again test the recent 1.4025 levels. Outlook remains bearish for cable with 1.37 the likely next target.

It took a while but eventually the FANG stocks eventually turned and helped the overall indices. Facebook rallied 6% – will be interesting to see their reporting in early May. Amazon was off 4.5% but reversed that to close up over 1%. Worth keeping an eye on YTD numbers, as after today the S+P is flat for the first quarter, DOW down 1.4% and NASDAQ still up now 3.2% YTD. Treasuries again bid with the demand appearing to come for the long end. The curve 2/10’s rally yet again to its flattest in over 10 years. Nice recovery by the days end with gains of around 1.5% across the board.

Japan 0.04%, US 2’s closed 2.27% (-1bp), 10’s closed 2.74% (-3bp), 30’s 2.967% (-3bp), Bunds 0.49% (-2bp), France 0.71% (-2bp), Italy 1.78% (-5bp), Greece 4.26% (-5bp), Turkey 12.19% (-23bp), Portugal 1.58% (-4bp), Spain 1.15% (-4bp), Gilts 1.35% (-1bp).