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23 April 2019

23/04/2019

Morning Chat and Market Data

Morning chat

Selling a better story:Thanks to the MP’s Easter break, Brexit news was scare leaving sterling to sag to just under $1.30 and headlines glued to the Extinction Rebellion. Yet below the headlines was enough economic data to help the FTSE100 to a slim 0.57% week’s gain. Tuesday’s employment data was almost bang on consensus with 179,000 more in work versus 180,000 expected and an in-line 3.9% unemployment rate and 3.4% wage gain. Inflation was 0.1% lower than expected by most measures as food prices eased. Meanwhile, milder March weather boosted retail sales 1.1% month-on-month when expected to fall 0.3%.

Can the tale continue this week? Given modest UK and US equity gains alongside 1¼ to 2½% gains in the major European markets and China, last week was reasonably positive. The coming week will be driven by a range of US data – housing sales, durable goods and Q1 GDP (expected to soften to +1.8%) – plus European flash consumer confidence data, Japanese industrial output and in the UK, factory orders and public sector borrowing. Not enough? Well, it’s also the busiest week for Q1 corporate earnings too. Coca-Cola, Facebook, Microsoft and Amazon amongst others all report in the next few days.

A laughing matter: Maybe we’re looking for politicians with a good sense of humour. In a crushing 48% landslide margin, the Ukraine elected comedian Volodymyr Zelenskiy as President. Now he just needs a more detailed script, though he’s expected to be pro-west. Given the 5-Star movement emerged on comedian Beppo Grillo’s efforts and now shares power in Italy, good one-liners certainly appear to rally support. Thursday’s local elections in the UK and the upcoming European Parliamentary elections in May – now muddied by Brexit – could see further gains by populist and non-mainstream candidates with a voter turn-out that’s often a joke.
Oil prices have rallied more than 3% after the US State Department announced they will not grant any extensions to Iran sanction waivers beyond May 2 for oil or condensate imports.

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +0.55 (+0.04%) at 1,253 (YTD: 15.64%; 5YR: 56.3%)
MSCI AC World Equities (USD) up +5.23 (+0.06%) at 8,992 (YTD: 15.70%; 5YR: 45.9%)
Barclays Global Aggregate Bonds down -0.37 (-0.08%) at 487 (YTD: 1.61%; 5YR: 3.9%)

Selected Equity Indices (Capital returns)
S&P 500 up +2.94 (+0.10%) at 2,908 (YTD: 16.00%; 5YR: 55.1%)
NASDAQ up +17.21 (+0.22%) at 8,015 (YTD: 20.80%; 5YR: 94.2%)
Euro STOXX 50 up +21.50 (+0.62%) at 3,499 (YTD: 16.59%; 5YR: 10.9%)
FTSE 100 down -11.44 (-0.15%) at 7,460 (YTD: 10.88%; 5YR: 12.6%)
CAC 40 up +17.29 (+0.31%) at 5,580 (YTD: 17.96%; 5YR: 25.9%)
DAX up +69.32 (+0.57%) at 12,222 (YTD: 15.75%; 5YR: 29.9%)
Nikkei 225 up +41.84 (+0.19%) at 22,260 (YTD: 11.22%; 5YR: 53.0%)
Hang Seng up +43.48 (+0.15%) at 30,007 (YTD: 16.10%; 5YR: 31.8%)
MSCI Emerging Markets down -3.50 (-0.32%) at 1,089 (YTD: 12.76%; 5YR: 8.5%)

Selected Government Bond Yields
US 10 Year down -0.01 at 2.58 (began the year at 2.68; 5 years ago it was 2.70)
US 2 Year down 0.00 at 2.38 (began the year at 2.49; 5 years ago it was 0.44)
UK 10 Year unchanged at 1.20 (began the year at 1.28; 5 years ago it was 2.68)
Germany 10 Year up +0.01 at 0.03 (began the year at 0.24; 5 years ago it was 1.52)
France 10 Year up +0.01 at 0.38 (began the year at 0.70; 5 years ago it was 2.01)
Italy 10 Year up +0.02 at 2.62 (began the year at 2.74; 5 years ago it was 3.09)
Japan 10 Year down 0.00 at -0.03 (began the year at -0.01; 5 years ago it was 0.61)
Barclays EM Basket down -0.01 at 6.00 (began the year at 6.22; 5 years ago it was 5.72)

Selected Currencies
$ strengthened +0.0012 versus € (+0.11%) at 1.1246 ($: YTD: 1.80%; 5YR: 18.6%)
€ weakened -0.0010 versus £ (+0.09%) at 1.1543 (€: YTD: -3.58%; 5YR: 5.2%)
$ strengthened +0.0003 versus £ (+0.02%) at 1.2981 ($: YTD: -1.84%; 5YR: 22.6%)
¥ strengthened +0.0500 versus $ (+0.04%) at 111.8900 (¥: YTD: 1.99%; 5YR: -8.6%)

Selected Commodities
Brent Crude ($/bbl) up +0.51 (+0.70%) at 73.87 (YTD: 38.93%; 5YR: -32.2%)
WTI Crude ($/bbl) up +1.70 (+2.66%) at 65.70 (YTD: 44.68%; 5YR: -35.7%)
Gold ($/ozt) down -1.72 (-0.13%) at 1273.21 (YTD: -0.72%; 5YR: -0.8%)
Copper ($/mt) down -80.00 (-1.22%) at 6476.00 (YTD: 8.57%; 5YR: -2.6%)

Data sourced from Bloomberg as of the close of last trading day.
YTD = Year-to-date return; 5YR = five year return

Nicholas Lowson Senior Portfolio Manager Kleinwort Hambros