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Market Talk October 26, 2015

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As expected Asia opened with a strong bid following the PBoC announcement, with the Nikkei over 19k. This did not last however as all indices turned lower towards the end of the trading day. The Nikkei closed on the days lows but still positive +121pts (+0.65%), Shanghai dipped briefly into negative territory just ahead of the close but managed to finish +18pts (+0.53%) whilst the HS closed down 35pts (-0.15%). European Indices put in an even less than impressive performance with all main opening lower and hardly making ground throughout the day. Actually, the same can be said of the US session also!

Oil again drifted lower in fairly thin trading. We saw TWI and Brent lower by 1.86% at $43.77 and -1.2% at $47.42 respectively. Nat Gas also had a bad day closing over 8% lower at 2.08. Gold drifted in a narrow $9 trading range eventually closing almost unchanged at $1164.

Bonds made back some of the ground they lost on Friday with US 10’s closing at 2.05%. the buying saw the curve flatten with 30’s reclaiming the most ground (3bp). 2/10 closed at +141bp. The spread TY/RX closed this evening at +155bp.

Not really too much to talk of today (German IFO and weak US Home Sales) but all eyes will be on a heavy earnings week, the FED and the BOJ towards the end.