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8 April 2019

08/04/2019

Morning Chat and Market Data

Morning Chat 

Another good week: Apart from some of the emerging markets and Australia, equity markets last week postedgenerally positive results. The Hang Seng was +4.04%, China’s CSI300 +8.95%, the major European exchanges were up around 2.3% save Germany’s DAX up 4.20%, while the S&P500 also managed 2.06%. Given the positive tone regarding the US-China trade talks and the more upbeat 196,000 US non-farm payrolls, you can understand the broadly positive market moves – and Asia doing better than western markets. Germany probably stands out the most, but the better-than-expected services & construction PMI data alongside the +0.7% industrial production number helped.

What might rain on the parade? BBC weather is predicting generally unsettled weather in England & Wales through Thursday. Let’s hope the market’s sunny sentiment prevails. There are a few factors that could make things changeable. New FOMC minutes will signal US Federal Reserve’s thinking on the rate outlook – markets are pricing in a benign environment. The US also sees a new JOLTs report giving clues to the employment outlook. Here in the UK we’ll get monthly GDP & industrial production data hinting at any Brexit influence. We also get a load of trade data and European industrial output too.

…and Brexit: This Friday, April 12, theoretically, the UK will leave the EU with no deal. Prime Minister Theresa May stated Sunday “we now have a stark choice: leave the European Union with a deal or do not leave at all". Now, the Lords haven’t passed Yvette Cooper’s Bill forcing the government to ask for an extension yet. However, May has already asked for a June 30 (again) extension while Tusk mooted his one year “flextension” and Irish PM Varadkar said a veto is “extremely unlikely”. Moreover, Jeremy Corbyn & May haven’t agreed any new deal. Expect a busy week.

Market Data 

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +4.84 (+0.39%) at 1,245 (YTD: 14.87%; 5YR: 56.8%)
MSCI AC World Equities (USD) up +30.50 (+0.34%) at 8,934 (YTD: 14.95%; 5YR: 46.5%)
Barclays Global Aggregate Bonds down -0.09 (-0.02%) at 487 (YTD: 1.71%; 5YR: 4.3%)

Selected Equity Indices (Capital returns)
S&P 500 up +13.35 (+0.46%) at 2,893 (YTD: 15.39%; 5YR: 56.2%)
NASDAQ up +46.91 (+0.59%) at 7,939 (YTD: 19.64%; 5YR: 93.0%)
Euro STOXX 50 up +5.54 (+0.16%) at 3,447 (YTD: 14.86%; 5YR: 8.5%)
FTSE 100 up +44.93 (+0.61%) at 7,447 (YTD: 10.68%; 5YR: 13.0%)
CAC 40 up +12.40 (+0.23%) at 5,476 (YTD: 15.76%; 5YR: 23.8%)
DAX up +21.74 (+0.18%) at 12,010 (YTD: 13.74%; 5YR: 26.5%)
Nikkei 225 down -45.85 (-0.21%) at 21,762 (YTD: 8.73%; 5YR: 49.0%)
Hang Seng up +111.70 (+0.37%) at 30,048 (YTD: 16.26%; 5YR: 33.5%)
MSCI Emerging Markets up +4.42 (+0.41%) at 1,085 (YTD: 12.36%; 5YR: 7.3%)

Selected Government Bond Yields
US 10 Year down -0.01 at 2.49 (began the year at 2.68; 5 years ago it was 2.68)
US 2 Year down -0.01 at 2.33 (began the year at 2.49; 5 years ago it was 0.39)
UK 10 Year up +0.03 at 1.12 (began the year at 1.28; 5 years ago it was 2.69)
Germany 10 Year down -0.01 at 0.00 (began the year at 0.24; 5 years ago it was 1.56)
France 10 Year down -0.01 at 0.35 (began the year at 0.70; 5 years ago it was 2.06)
Italy 10 Year up +0.00 at 2.48 (began the year at 2.74; 5 years ago it was 3.22)
Japan 10 Year down -0.01 at -0.05 (began the year at -0.01; 5 years ago it was 0.62)
Barclays EM Basket up +0.00 at 6.00 (began the year at 6.22; 5 years ago it was 5.70)

Selected Currencies
$ weakened -0.0013 versus € (-0.12%) at 1.1228 ($: YTD: 1.96%; 5YR: 18.6%)
€ weakened -0.0024 versus £ (+0.21%) at 1.1629 (€: YTD: -4.29%; 5YR: 4.3%)
$ weakened -0.0041 versus £ (-0.32%) at 1.3056 ($: YTD: -2.43%; 5YR: 22.0%)
¥ strengthened +0.3000 versus $ (+0.27%) at 111.4300 (¥: YTD: 1.59%; 5YR: -8.5%)

Selected Commodities
Brent Crude ($/bbl) up +0.12 (+0.17%) at 70.08 (YTD: 31.80%; 5YR: -34.4%)
WTI Crude ($/bbl) up +0.98 (+1.58%) at 63.08 (YTD: 38.91%; 5YR: -37.6%)
Gold ($/ozt) up +5.79 (+0.45%) at 1297.54 (YTD: 1.18%; 5YR: -0.8%)
Copper ($/mt) down -50.00 (-0.78%) at 6401.00 (YTD: 7.31%; 5YR: -3.3%)

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