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6 January 2020

06/01/2020

Market Data and Morning Chat

Morning Chat 

Thew two days: We’ve seen 2020 over two days of trading, and they have generally shown a strong start to the year for European equities, but disappointing for Asia and stumbling a bit in the US.  Bond prices have also shown some strength with yields sliding back about 0.1% after rising into the year-end.  The early equity gains came on the investor optimism for a mid-month signing of a US-China trade deal following a Donald Trump tweet, However, despite optimism, Asia slipped on the weaker-than-expected Chinese Caixin Manufacturing PMI – announced at 51.5 not the 51.8 expected – and for the US…

Threw today’s: It started with Donald Trump’s cryptic tweet (doesn’t it always) on 2:32 am January 3 of a US flag. News quickly emerged of the US successfully eliminating General Qassem Soleimani, the leader of the Iranian Quds force (which the US deems a Foreign Terrorist Organisation). Markets didn’t react on Thursday, but with the official confirmation at 9:46pm, oil and gold started to move.  US equities sold off Friday. Which takes us to today; oil’s rallied further (pushed more by a big inventory draw), gold’s now up about 4% year-to-date, and increased geo-political tensions will likely further temper equities.

Through Friday’s: Market reactions beyond today will likely be driven by political rhetoric over Soleimani’s elimination. Tensions could intensify, or could evaporate much like the market reaction to the Saudi refinery and tanker attacks – all mostly forgotten within a week. US defense companies – which rallied strongly on Friday may slide back. Beyond that we’ll be looking to the Markit services PMI data for insights – the UK’s is expected to signal a further slowing, but for the continent an improvement. Then US & German trade data, UK productivity, and for Friday – non-farm payrolls, always a market favorite (with only 160,000 expected).

Yep, Asian markets are down this morning and European futures are sliding by ½% or so
… while oil prices continue up & Chinese oil cos Petrochina (3.5%) CNOOC (+3.5%) lead
… and Trump is threatening sanctions on Iraq – yes, Iraq – if US troops are expelled
Meanwhile, Spanish PM Sanchez is hoping to pull together a governing coalition, but…
… the court ruling against Catalonian President Quim Torra could frustrate his efforts

Market Data

Selected Global Aggregates (Total returns, unhedged)    
MSCI AC World Equities (Local) down -5.63 (-0.41%) at 1,381 (YTD: 0.43%; 5YR: 63.3%)
MSCI AC World Equities (USD) down -53.57 (-0.53%) at 10,000 (YTD: 0.21%; 5YR: 61.9%)
Barclays Global Aggregate Bonds up +1.06 (+0.21%) at 513 (YTD: 0.34%; 5YR: 12.2%)
    
Selected Equity Indices (Capital returns)    
S&P 500 down -23.00 (-0.71%) at 3,235 (YTD: 0.13%; 5YR: 61.5%)    
NASDAQ down -71.42 (-0.79%) at 9,021 (YTD: 0.54%; 5YR: 96.4%)    
Euro STOXX 50 down -19.87 (-0.52%) at 3,773 (YTD: 0.75%; 5YR: 25.4%)    
FTSE 100 up +18.10 (+0.24%) at 7,622 (YTD: 1.06%; 5YR: 19.7%)    
CAC up +2.66 (+0.04%) at 6,044 (YTD: 1.11%; 5YR: 48.0%)    
DAX down -166.79 (-1.25%) at 13,219 (YTD: -0.23%; 5YR: 39.6%)    
Nikkei 225  down -451.76 (-1.91%) at 23,205 (YTD: -1.91%; 5YR: 33.0%)    
Hang Seng down -292.88 (-1.03%) at 28,159 (YTD: -0.11%; 5YR: 19.9%)    
MSCI Emerging Markets down -4.15 (-0.37%) at 1,124 (YTD: 0.83%; 5YR: 20.2%)    
    
Selected Government Bond Yields    
US 2 Year up +0.01 at 1.54 (began the year at 1.57; 5 years ago it was 0.63)    
US 10 Year down 0.00 at 1.79 (began the year at 1.92; 5 years ago it was 1.94)    
UK 10 Year down -0.06 at 0.74 (began the year at 0.82; 5 years ago it was 1.56)    
Germany 10 Year up +0.04 at -0.25 (began the year at -0.19; 5 years ago it was 0.45)    
France 10 Year up +0.03 at 0.05 (began the year at 0.12; 5 years ago it was 0.73)    
Italy 10 Year down -0.04 at 1.31 (began the year at 1.41; 5 years ago it was 1.86)    
Japan 10 Year down -0.01 at -0.03 (began the year at -0.02; 5 years ago it was 0.29)    
Barclays EM Basket down -0.01 at 4.27 (began the year at 4.27; 5 years ago it was 5.28)
    
Selected Currencies    
$ strengthened +0.0009 versus € (+0.08%) at 1.1163 ($: YTD: 0.59%; 5YR: 6.4%)    
€ weakened -0.0006 versus £ (+0.05%) at 1.1720 (€: YTD: 0.79%; 5YR: 8.6%)    
$ strengthened +0.0006 versus £ (+0.05%) at 1.3082 ($: YTD: 1.36%; 5YR: 13.8%)    
¥ weakened -0.1900 versus $ (-0.18%) at 108.1600 (¥: YTD: -0.39%; 5YR: 9.5%)    
    
Selected Commodities    
Brent Crude ($/bbl) up +1.26 (+1.83%) at 70.22 (YTD: 5.72%; 5YR: 39.8%)    
WTI Crude ($/bbl) up +1.87 (+3.06%) at 63.05 (YTD: 3.26%; 5YR: 19.7%)    
Gold ($/ozt) up +22.65 (+1.46%) at 1571.55 (YTD: 3.20%; 5YR: 29.1%)    
Copper ($/mt) down -58.50 (-0.95%) at 6129.50 (YTD: -0.72%; 5YR: -2.0%)    
    
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