An extremely dull day for most core equity markets across the globe today with plus or minus 0.5% movements throughout. If anything to write about it was probably that US stocks closed close to the days lows as they all drifted but even that it probably clutching at straws.
Currencies were also quiet today but we did see the DXY (US Dollar Index) climb again (100.28 last seen) but only to close off of its daily high. What the Euro lost was off-set by the GBP and CHF (Swiss). All eyes are still on the ECB and awaiting further stimulus. Even the Swiss Central Bank commented today that they may be forced to take action if the Euro falls upon ECB’s actions. The major news between the FX dealers was the percentage weighting awarded to China in the IMF’s SDR (Special Drawing Rights). They awarded China 10.92% which will obviously be seen within China as a badge of honour. We believe with this inclusion the weightings should now around USD 41.7%; Euro 30.9%; Yuan 10.9%; JPY 8.3% and GBP 8.09%.
The European Bond markets drifted a little today with core and peripherals trading lower (in price higher in yield). The interest rate differential between the US 10yr Bond and the German 10yr Bond traded slightly tighter at +173bp. Germany at 0.48% and USA at 2.21%.