Archives of “April 18, 2019” day

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European share end with mixed results on the day

  
Analysis, Global Indices

Yields are lower today

The European shares are ending the day higher on the day despite weaker Flash PMI data
  • German Dax, rose 0.5%
  • France’s CAC rose 0.25%
  • UKs FTSE fell -0.1%
  • Spain’s Ibex rose 0.6%
  • Italy’s FTSE MIB fell -0.2%

Benchmark 10 year note yields fell today:

  • Germany 0.024%, down -5.6 bps
  • France, 0.37%, down -5.5 bps
  • UK, 1.194%, -4.2 bps
  • Spain 1.067%, -3.9 bps
  • Italy 2.601%, -1.2 bps
In other markets as London/European traders look to exit:
  • Spot gold is little changed at $1274.21
  • WTI crude oil is  down -$0.11 at $63.65
US stocks are mixed. The Nasdaq has been mostly lower today but is recovering. The Dow stocks have been leading:
  • S&P, up 1.30 points or 0.05% at 2901.60
  • Nasdaq down -14 points at 7981.90
  • Dow +90 points at 26539.
The forex market has the JPY as the strongest and the NZD as the weakest. That was the leaders at the start of the day as well. The USD is also stronger.

Mueller report published

  
  Analysis

It’s out

Mueller report header
Headlines:
  • Trump not involved in underlying crime of collusion with Russia
  • Says he lacks confidence to clear Trump of obstruction
  • Trump told Mueller he had “no recollection” of possible Russian support
  • Concluded Congress can determine Trump obstruction
  • Trump said he didn’t recall learning about Trump Tower meeting
  • Considered written answers from Trump inadequate and considered subpoena but decided against it
There is a great deal of focus on Trump but by now that’s old news. What’s notable to me, and could have some repercussions for RUB is the conclusion that it was Russian military intelligence that was behind the hacking and leaks.
GRU involvement

USDCHF moves to the highest level since March 2017

  
Analysis, Forex

Above 2018 high at 1.01276

The USDCHF moved above the 2018 high at 1.01276 and the March 2019 high at 1.01236.  The high reached 1.0137. It is currently trading at 1.0130.
USDCHF Above 2018 high at 1.01276
Looking at the 4 hour chart, the pair is moved aboved a channel trend line at 1.0103 currently.   That level, and the 1.0092-97 will be levels to get below to weaken the technical bias.
Until, the broken levels give way (one by one), the buyers remain more in control.   The pair has been racing higher since the weekend comments from SNB Jordan who said the central bank could still lower rate and/or intervene. The low this week was down at 1.0008.
USDCHF moves to the highest since March 2017

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China: There have been new progress in negotiating text of trade deal with US

  
Analysis, Economy

Some positive headlines for risk at least

  • China and US still conducting talks on trade deal text
  • “Plenty of work” still remaining with US on trade deal
Okay, the follow up comments aren’t so optimistic. Sure, both sides are still progressing towards some semblance of a deal but that is already largely priced in by markets. The fact that they mention that there is still “plenty of work” to be done means we will still have to put this on ice for the time being.

Labour would win EU elections, European Parliament poll shows

  
Analysis, Politics

The Labour party would emerge as the biggest UK force in the European Parliament in British EU elections, according to new projections which show a surge in support for Nigel Farage’s Brexit party.

Labour would return 19 MEPs to Brussels in an EU election which will need to be held next month if Theresa May cannot pass her Brexit deal through parliament before May 22.

The Tories would be in second with 12 seats, and the Brexit party led by Mr Farage, on 10 MEPs, according to the projections. The UK Independence Party would be in fourth place with nine seats.

The projections are the first time the European Parliament has published new MEP seat forecasts to include the UK. Analysts have warned the estimates for the UK are more unpredictable than most as formal campaigning for the elections has yet to begin in Britain.

An internal poll from the EP, carried out on April 10 and seen by the FT, gave Labour a much bigger lead with 28 MEPs.

The UK’s participation in the elections has been opposed by EU leaders like Guy Verhofstadt, the parliament’s Brexit chief, who think it will import the “poison” of the leave campaign into European politics.

Haven flows dominate as poor Eurozone economic data reignite global growth worries

  
Analysis, Economy

10-year bund yields slump by 5 bps to just 0.03% now

Germany 10-year bond yields

The sluggish data from Germany and overall Eurozone PMIs are spreading jitters across markets as haven flows start to dominate once again. 10-year bund yields are down by 5 bps to 0.03% while Treasury yields are seen slumping by 4.5 bps to 2.548% currently.
And in the currencies space, that is helping to keep the likes of the dollar, yen and swissie bid on the day. All major currencies are close to session lows currently against the three currencies mentioned as haven/risk-off flows start to dominate proceedings.
According to Markit, they view that the Eurozone economy should only grow by 0.2% in Q1 2019. That’s really awful and it is just going to spread more fear on global growth worries.

Eurozone April flash manufacturing PMI 47.8 vs 48.0 expected

  
Analysis, Economy

Latest data released by Markit – 18 April 2019

  • Prior 47.5
  • Services PMI 52.5 vs 53.1 expected
  • Prior 53.3
  • Composite PMI 51.3 vs 51.8 expected
  • Prior 51.6
Ouch, these readings are certainly not helping with euro sentiment. Manufacturing is a slight miss on expectations but the services and composite readings overall are softer than expectations and also softer compared to the March readings.
EUR/USD is being dragged lower on the release here to 1.1254 with the dollar and yen staying bid as a result of haven flows. Bund yields and Treasury yields are sinking, resulting in the more risk-off tone as we begin the session.

Nikkei 225 closes lower by 0.84% at 22,090.12

  
Analysis, Global Indices

Japanese stocks slump as optimism remains fleeting among equities

Nikkei 17-04

Asian equities are soggy following declines seen in US stocks overnight. The Nikkei is also joined by the Hang Seng and Shanghai Composite as both are also down on the day, falling by 0.6% and 0.2% respectively.

In general, risk sentiment remains rather tepid with Treasury yields also looking heavy to start the day. That is leaving USD/JPY to be a little lower at 111.85 as we begin the European morning session.
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