European equity close: Modest moves but FTSE 100 higher

Closing changes for the main European bourses:

  • UK FTSE 100 +0.5%
  • French CAC 40 -0.1%
  • German DAX -0.1%
  • Italy MIB +0.1%
  • Spain IBEX +0.2%
The FTSE is higher today despite GBP gains but it’s been a struggle in the past month and we’re not meaningfully off the lows.
Closing changes for the main European bourses:

US Stocks jump, government bonds sell-off on Brexit draft deal hopes

US and European stocks jumped, government bonds sold off and the pound leapt as investors remained hopeful British and EU negotiators were close to a draft deal on Brexit. The S&P 500 finished 1 per cent higher in New York on Tuesday in a broad-based rally that was the benchmark’s fourth advance in five sessions and left it about 1 per cent from its record high close in late July. Healthcare was the best-performing sector in the index as investors cheered earnings from Johnson & Johnson, while the telecommunications services and technology sectors were next best. Several key banks including JPMorgan, Citigroup, Wells Fargo and Goldman Sachs reported earnings ahead of the open in New York. In early trade, JPMorgan was the standout gainer, but the broad market rally today ultimately lifted the share prices of rivals.

The Nasdaq Composite rose 1.2 per cent. US Treasuries tumbled, driving yields higher. The yield on the benchmark 10-year Treasury was up 1.8 basis points to 1.771 per cent, having been down 4 bps earlier in the session. European stocks extended gains to leave the broad Stoxx 600 up 1.1 per cent and Germany’s Dax up 1.2 per cent. London’s FTSE 100 closed fractionally lower. Sterling was up 1.2 per cent in afternoon trade in New York to $1.2766 and gained 1.3 per cent against the euro to €1.1572, its highest since May, spurred along by a Bloomberg report that UK and EU negotiators were now close to a draft Brexit deal.

Reflecting the sell-off in the government bond markets, the yield on the UK 10-year Gilt was up 0.6 bps to 0.699 per cent, while that on the Germany’s 10-year Bund rose 1.9bp to minus 0.405 per cent. Earlier in the day, Michel Barnier, Brussels’ chief Brexit negotiator, has said a new withdrawal deal between the EU27 and the UK is “still possible” this week, but warned that it has become “more and more difficult” as the clock ticks towards a crucial bloc summit starting on Thursday. Figures released earlier Tuesday showed investor sentiment about the German economy declined less than expected in October, while remaining subdued over worries about the US-China trade war and the potential for a disruptive Brexit. Asian equity markets were mixed, with Japan’s Topix outperforming as traders returned from a holiday.

China’s CSI 300 gauge of Shanghai- and Shenzhen-listed names fell 0.4 per cent after data showed consumer price inflation increased at its fastest pace in six years in September. US Treasury secretary Steven Mnuchin warned overnight that a new round of tariffs set for December 15 on $156bn of Chinese goods would be triggered if Beijing failed to seal the limited deal tentatively struck with Donald Trump last week, underlining the fragility of that truce. “Not enough was achieved to alter meaningfully the fundamental global economic outlook, in our view,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “We maintain an underweight to equities. We will be looking for signs of progress on unresolved trade issues and a response in the economic data that might lead us to reassess our positioning.”

Eurostoxx futures +0.4% in early European trading

Relatively mild gains observed in early trades

  • German DAX futures +0.3%
  • French CAC 40 futures +0.3%
  • UK FTSE futures +0.2%
This is largely reflective of the mood seen in US futures, which are slightly higher as well to start the European morning.
That said, the overall risk mood remains more measured with Treasury yields on the weaker side playing catch up to price action yesterday.
So far, there’s still the feeling that traders and investors are still quite indecisive about risk trades following the US-China trade truce. As such, the next set of headlines is likely the spot to watch to push risk towards a certain direction.

Nikkei 225 closes higher by 1.87% at 22,207.21

Japanese stocks play catch up after the long weekend

Nikkei 15-10

The gains are in part to do with the US-China trade truce but also some talk of reconstruction demand after the hit from Typhoon Hagibis.

The overall risk mood in the region remains more mixed with the Hang Seng and Shanghai Composite both sitting lower.

Markets are still very much lacking direction at the moment as traders and investors are awaiting the next push in risk sentiment. The trade truce looks to be old news at this point so let’s see if we’ll get any other headlines to move things along.
US futures are up by 0.3% currently and that should lend to mild gains in European futures as well but there isn’t anything in that to really shift the dial for now.

European shares end the day with mixed results

Some of the major indices are higher and a few are lower

The major European indices are ending the day mixed
  • German DAX, +0.3%
  • France’s CAC, +0.4%
  • UK’s FTSE, +0.5%
  • Italy’s FTSE MIB, -0.3%
  • Spain’s Ibex, -0.5%
In the European debt market, the benchmark 10 year yields are moving back to the downside after positive moves at the end of last week (especially in the UK yields).  The UK 10 year yield is leading the way to the downside after hope for a Brexit deal with the EU started to fizzle over the weekend.  The UK 10 year yield is down -7.0 basis points.
Some of the major indices are higher and a few are lower

European shares end the day (and the week) with solid gains

Global hope on Brexit and a US/China deal

The major European indices are ending the day (and the week) with solid gains. The provisional closes are showing:
  • German DAX, up 2.7%. That is the best day cents January 4
  • France’s CAC, up 1.7%
  • UK’s FTSE, up 0.7%
  • Spain’s Ibex, up 1.7%
  • Italy’s FTSE MIB, up 1.8%
For the week, the major indices are also ending with decent games.  Provisional changes for the week are showing:
  • German DAX, +4.1%
  • France’s CAC, +3.2%
  • UK’s FTSE, +1.22%
  • Spain’s Ibex, +3.28%
  • Italy’s FTSE MIB, +3.1%

In the European debt market, the benchmark 10 year yields are mostly higher with UK yields soaring by 12.1 basis points on hopes for a Brexit deal.

UK yields have soared by 12.1 basis points today
Looking at the yield chart for the 10 year in the UK, the yield moved above its 100 day moving average today for the 1st time since little looks above in April and May (that failed).  The last extended time above the 100 day MA was back in November 2018 (at much higher levels).
The UK 10 year yield

European shares ended the session higher on the day

US stocks keep gains and trade near highs

the European major indices ended the session today with gains, with France’s CAC and Spain’s Ibex having the largest gains (around 1.25%). THe UK FTSE laggged at 0.28%.

Meanwhile US shares remain higher but below their peaks. All 3 indices were up about 1% at the highs. They are currently between up 0.82% (for the Dow) and 0.88% (for the Nasdaq).
US stocks keep gains and trade near highs_In the European debt market, yields have soared higher with the UK yield up the most at 12.8 basis points on hopes for a successful Brexit deal. The German yield is up 7.9 basis points. France’s yields are up 7.6 basis points.
European yields are soaring higher in trading today

European indices down as Dax falls under 12000

Europe down

Europe down 
  • Dax: -1.05%
  • UK FTSE: -0.13%
  • Euro Stoxx: -0.77%
  • France 40 (CAC): -0.74
  • IBEX:-1.00%
  • Italian FTSE:-0.94%

Brexit risk, US/China talks looking bleaker have all weighed on sentiment. Meanwhile, gold and silver up +0.60% and +0.50% respectively. GBPUSD approaching key support at 1.2200. The USDJPY yen sold off on risk off flows (JPY strength) through 107.00 and AUDJPY making its way down to 72.00 and key daily support.

European equity close: France leads a rebound but UK falls

Closing changes for the main bourses:

  • UK FTSE 100 -0.5%
  • French CAC +0.6%
  • Italy MIB +0.4%
  • Spain IBEX +0.2%
Germany was holiday today for the national day of unity.
I have been keeping a close eye on the CAC-40 this week because the reversal Tuesday was the first sign of global trouble. It was the leader today but the bounce still pales in comparison to the fall on Tues-Wed.
Closing changes for the main bourses:

European shares are beaten down. German DAX falls -2.5%. France’s CAC -2.9%

Ouch.  European shares take a beating.

The European major indices are closed and the provisional closes are not looking good. The major indices are all beaten down by 2%-3%  declines.
The provisional closes are showing:
  • German DAX, -2.5%
  • France’s CAC, -2.9%
  • UK’s FTSE, -3.2%
  • Spain’s Ibex, -2.7%
  • Italy’s FTSE MIB, -2.8%
In the European debt market, the benchmark 10 year yields are ending the session higher, but off the highest levels of the day.  Below is a snapshot of the current yields, changes and high low yields.
Ouch.  European shares take a beating.
US stocks are also down sharply and trading near lows.
  • S&P index, -1.91%
  • NASDAQ index, -1.75%
  • Dow industrial average, -2.0%

In other markets:

  • spot gold is surging and back above the $1500 level. The price is up $22.34 or 1.51% at $1501.50.
  • WTI crude oil futures is trading down $1.35 on expectations of slower growth. That is down 2.5% at $52.28. The inventory data showed a higher build then expectations today
In the forex, the JPY remains the strongest currency on flight to the relative safety of the JPY. The CAD has taken over as the weakest.  The USDCAD is now trading back above its 200 day moving average at 1.3288.