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17 June 2019

17/06/2019

Market Data and Morning Chat

Morning Chat

On one hand: Friday was a down day. Global equity markets pretty much all saw red, with most down 0.1% to 1.0% and only the likes of Japan and Turkey bucking the trend. The Chinese CSI300 was off 0.8% and the Hang Seng 0.7%. Protests in Hong Kong – which have continued through the weekend despite the controversial extradition law being suspended –are not a positive, but the key factor was May Chinese industrial production slowing to 5.0% growth, a 17-year low, and notably below the 5.5% expected. Alongside weaker fixed investment, the slowdown is a likely consequence of US tariffs.

On the other: The week however was a positive one – other than for the likes of Turkey – with markets up on the order of 0.1% to 0.4% for Europe (The FTSE100 rose 0.2% while Italy managed a solid 1.2%), 0.5 to 0.8% for the US, and 1.0% to 1.7% for Asia – despite those Hong Kong protests! Developed market bond yields were also lower last week with Germany’s 10-year bund now at all-time low -0.26% and Switzerland on -0.58%. The cause was a range of mildly disappointing data across geographies, but coupled with muted inflation it boosted US rate cut probabilities.

… and down the line: We’ll geta bit more of the Tory leadership race, some central bank insight in the UK, US and Japan and a bit of flashing this week. Steady on now, flash Purchasing Manager Data (PMI) I mean. The US, Europe and Japan will see PMI data which usually has an impact. Wednesday will be the UK retail sales data (the average forecast is for a slowdown to +0.2%) alongside the inflation numbers. Wednesday also sees the US Fed rate decision – that will be a market focus although no change this time is the consensus outcome.

Those Hong Kong protests are now estimated to have swollen to an estimated 2million people.
Matt Hancock backs Boris Johnson for PM after standing down from the leadership race
Facebook adds $3.86 (2.2%) of real money on announcing it will launch a cryptocurrency.

Market Data

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) down -2.64 (-0.21%) at 1,236 (YTD: 14.07%; 5YR: 48.6%)
MSCI AC World Equities (USD) down -24.35 (-0.27%) at 8,917 (YTD: 14.74%; 5YR: 39.7%)
Barclays Global Aggregate Bonds down -0.44 (-0.09%) at 499 (YTD: 4.16%; 5YR: 6.0%)

Selected Equity Indices (Capital returns)
S&P 500 down -4.66 (-0.16%) at 2,887 (YTD: 15.16%; 5YR: 48.7%)
NASDAQ down -40.47 (-0.52%) at 7,797 (YTD: 17.50%; 5YR: 79.8%)
Euro STOXX 50 down -11.31 (-0.33%) at 3,379 (YTD: 12.59%; 5YR: 3.2%)
FTSE 100 down -22.79 (-0.31%) at 7,346 (YTD: 9.18%; 5YR: 8.6%)
CAC 40 down -8.01 (-0.15%) at 5,368 (YTD: 13.46%; 5YR: 18.3%)
DAX down -72.65 (-0.60%) at 12,096 (YTD: 14.56%; 5YR: 21.9%)
Nikkei 225 up +7.11 (+0.03%) at 21,124 (YTD: 5.54%; 5YR: 41.1%)
Hang Seng up +173.06 (+0.64%) at 27,291 (YTD: 5.59%; 5YR: 17.6%)
MSCI Emerging Markets down -7.00 (-0.69%) at 1,015 (YTD: 5.11%; 5YR: -2.7%)

Selected Government Bond Yields
US 10 Year up +0.02 at 2.10 (began the year at 2.68; 5 years ago it was 2.65)
US 2 Year up +0.02 at 1.86 (began the year at 2.49; 5 years ago it was 0.48)
UK 10 Year up +0.01 at 0.85 (began the year at 1.28; 5 years ago it was 2.78)
Germany 10 Year up +0.00 at -0.25 (began the year at 0.24; 5 years ago it was 1.40)
France 10 Year down 0.00 at 0.09 (began the year at 0.70; 5 years ago it was 1.77)
Italy 10 Year down -0.03 at 2.31 (began the year at 2.74; 5 years ago it was 2.82)
Japan 10 Year up +0.01 at -0.13 (began the year at -0.01; 5 years ago it was 0.59)
Barclays EM Basket down -0.02 at 6.02 (began the year at 6.22; 5 years ago it was 5.33)

Selected Currencies
$ weakened -0.0001 versus € (-0.01%) at 1.1209 ($: YTD: 2.12%; 5YR: 17.2%)
€ strengthened +0.0010 versus £ (-0.09%) at 1.1229 (€: YTD: -0.88%; 5YR: 11.6%)
$ strengthened +0.0009 versus £ (+0.07%) at 1.2587 ($: YTD: 1.25%; 5YR: 25.8%)
¥ weakened -0.0300 versus $ (-0.03%) at 108.5800 (¥: YTD: -0.99%; 5YR: -5.9%)

Selected Commodities
Brent Crude ($/bbl) down -0.35 (-0.56%) at 62.54 (YTD: 17.62%; 5YR: -44.8%)
WTI Crude ($/bbl) up +0.23 (+0.44%) at 52.51 (YTD: 15.64%; 5YR: -50.9%)
Gold ($/ozt) down -2.80 (-0.21%) at 1339.05 (YTD: 4.41%; 5YR: 5.4%)
Copper ($/mt) down -36.00 (-0.61%) at 5822.00 (YTD: -2.40%; 5YR: -12.5%)

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