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19 March 2019

19/03/2019

Morning Chat and Market Data

Morning Chat 

Political Correctness may be annoying… May: Prime Minister May looked to rally and cajole MPs to support her deal in another vote this week – possibly even today. That was the plan. She needs 75 votes from either the DUP, Brexiteer Conservatives or Labour, a tough ask. 23 Conservative MPs declared they would never sway, while the DUP were “in discussions”. Now it’s somewhat moot. Speaker John Bercow, citing a 415-year old Parliamentary convention blocking the same motion from another vote when it has already been decided, has banned the vote unless the deal is substantially different. Back to Brussels then.

A little Dōsatsu: A selection of Japan’s economic data released Sunday and Monday gave some insight – Dōsatsu – into the state of the economy. First, trade data – always important – showed an improved balance of trade but only because imports sagged by a more-than-expected 6.7% on falling petroleum and petroleum product purchases versus reduced exports. Then yesterday the, at least, better-than-expected month-on-month 3.4% decline in industrial production driven by a big decline in business-oriented machinery and electronic parts – in part due to the 14% fall on South Korean exports. The good news? The weakness is more from global than domestic Japanese causes.

Beto on him while Biden your time: The Democrats nearly have a full field of the expected declared runners as millennial favorite Beto O’Rourke and Kirsten Gillibrand threw their hats into the ring. Texas-native O’Rourke – who lost to incumbent Senator Ted Cruz in 2017 – managed to raise $6.1million on his first day, more than any other democrat candidate so far. Senator Gillibrand presently holds Hilary Clinton’s old seat in New York. Joe Biden may have hinted Sunday he’ll run, but he’s yet to declare officially. Even so, Biden and Saunders lead polling, with O’Rourke, Warren and Harris battling for third.

Market Data 

Selected Global Aggregates (Total returns, unhedged)
MSCI AC World Equities (Local) up +5.92 (+0.49%) at 1,221 (YTD: 12.66%; 5YR: 55.2%)
MSCI AC World Equities (USD) up +38.35 (+0.44%) at 8,781 (YTD: 12.99%; 5YR: 44.8%)
Barclays Global Aggregate Bonds up +0.57 (+0.12%) at 486 (YTD: 1.49%; 5YR: 4.4%)

Selected Equity Indices (Capital returns)
S&P 500 up +10.46 (+0.37%) at 2,833 (YTD: 13.01%; 5YR: 52.2%)
NASDAQ up +25.95 (+0.34%) at 7,714 (YTD: 16.26%; 5YR: 79.1%)
Euro STOXX 50 up +1.86 (+0.05%) at 3,388 (YTD: 12.88%; 5YR: 10.1%)
FTSE 100 up +70.91 (+0.98%) at 7,299 (YTD: 8.49%; 5YR: 11.0%)
CAC 40 up +7.51 (+0.14%) at 5,413 (YTD: 14.42%; 5YR: 25.6%)
DAX down -28.63 (-0.25%) at 11,657 (YTD: 10.40%; 5YR: 25.7%)
Nikkei 225 down -17.65 (-0.08%) at 21,567 (YTD: 7.75%; 5YR: 49.1%)
Hang Seng up +12.50 (+0.04%) at 29,422 (YTD: 13.84%; 5YR: 36.4%)
MSCI Emerging Markets up +11.97 (+1.13%) at 1,069 (YTD: 10.72%; 5YR: 12.5%)

Selected Government Bond Yields
US 10 Year down -0.01 at 2.59 (began the year at 2.68; 5 years ago it was 2.77)
US 2 Year down -0.01 at 2.44 (began the year at 2.49; 5 years ago it was 0.42)
UK 10 Year down -0.02 at 1.20 (began the year at 1.28; 5 years ago it was 2.70)
Germany 10 Year down -0.01 at 0.08 (began the year at 0.24; 5 years ago it was 1.60)
France 10 Year down -0.01 at 0.45 (began the year at 0.70; 5 years ago it was 2.16)
Italy 10 Year up +0.00 at 2.45 (began the year at 2.74; 5 years ago it was 3.39)
Japan 10 Year down -0.01 at -0.05 (began the year at -0.01; 5 years ago it was 0.61)
Barclays EM Basket down -0.01 at 6.03 (began the year at 6.22; 5 years ago it was 5.81)

Selected Currencies
$ weakened -0.0020 versus € (-0.18%) at 1.1348 ($: YTD: 0.91%; 5YR: 18.5%)
€ weakened -0.0014 versus £ (+0.12%) at 1.1697 (€: YTD: -4.85%; 5YR: 2.2%)
$ weakened -0.0040 versus £ (-0.30%) at 1.3274 ($: YTD: -4.14%; 5YR: 20.3%)
¥ strengthened +0.1800 versus $ (+0.16%) at 111.2500 (¥: YTD: 1.43%; 5YR: -8.6%)

Selected Commodities
Brent Crude ($/bbl) up +0.32 (+0.48%) at 67.23 (YTD: 26.44%; 5YR: -36.4%)
WTI Crude ($/bbl) up +0.57 (+0.97%) at 59.09 (YTD: 30.13%; 5YR: -40.7%)
Gold ($/ozt) up +1.99 (+0.15%) at 1305.69 (YTD: 1.81%; 5YR: -1.8%)
Copper ($/mt) down -6.00 (-0.09%) at 6425.00 (YTD: 7.71%; 5YR: -0.9%)

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