Japanese stocks recover to end the day closer to flat levels
The market is keeping more cautious but any hints of a major risk-off play remains at bay for now, with investors all still waiting on US president Trump’s announcement on China that is to come later in the trading day.
Despite the slightly lower finish, it was still a solid week for the Nikkei as it gained by a little over 7% in trading this week.
Elsewhere in the region, the Hang Seng is currently down by 0.6% while the Shanghai Composite is up by 0.1%; both also off the lows posted earlier in the session.
Looking to the currencies space, the dollar continues to trade lower as the euro breaks higher above 1.1100. USD/JPY is also being pressured closer towards 107.00 currently.
The Nikkei closes at its highest level since 27 February
Japanese stocks are having yet another solid day, building on the gains from Wall Street overnight as the Nikkei now even breaks back above its 200-day moving average.
The close today is the highest since 27 February, as the index is now up by nearly 34% from the lows posted back in March.
Elsewhere in the region, the Hang Seng is having a rough time amid geopolitical tensions with the US having said that Hong Kong no longer warrants ‘special status’. The index is down by 1.4% but off earlier lows of over 2% after the lunch break.
In the currencies space, the mood is still rather mixed to start European trading. The dollar is sitting mixed across the board with little notable movement in general.
The aussie is mildly weaker and off earlier lows, with AUD/USD sitting just above 0.6600 now after also bouncing off its 100-hour moving average in overnight trading.
Keep the free money rolling
- German DAX +1.3%
- French CAC +1.5%
- Italy MIB flat
- UK FTSE 100 +1.1%
- Spain IBEX +2.3%
The DAX rose above the 61.8% retracement of the March drop today but closed back down below it.
- German DAX futures +1.0%
- UK FTSE futures +2.4%
- Spanish IBEX futures +1.0%
This follows a round of solid gains across the board to start the week yesterday, in which we saw the DAX starting to break out to fresh highs in nearly two months:
The Nikkei breaks above its 100-day moving average
Japanese stocks are taking heart from the more positive risk mood today, as the rally in the equities space is starting to see a new extension leg to start the week.
The close in the Nikkei is the highest since 5 March, with gains of 2% also observed in the Hang Seng and the Shanghai Composite index also gaining by 0.8% on the day.
US futures are still keeping near 2% gains and that is feeding the more positive risk appetite to start the session. In the currencies space, the dollar and yen are weaker as a result with AUD/USD sitting near session highs at around 0.6578 currently.
Closing changes for the main European equity bourses:
- German DAX +2.7%
- French CAC +1.9%
- Italy MIB +1.4%
- Spain IBEX +2.2%
- UK markets closed
That’s an impressive breakout in the DAX.
Italy’s FTSE MIB bucks the trend with a 1.2% gain
The major European indices are ending the week with mostly modest gains/losses for Friday. The indices are also well off of their intraday lows. The provisional closes are showing:
- German DAX, up 0.1%. At the low the index was down -1.8%
- France’s CAC, up 0.1%. At the low the index was down -1.72%
- UK’s FTSE 100, -0.3%. At the low the index is down -2.11%
- Spain’s Ibex, unchanged. At the low the index is down -1.5%
- Italy’s FTSE MIB, +1.2%. At the low the index was down -1.56%
In the European debt market, the benchmark 10 year yields are ending the session with mixed results. Germany, France, UK yields lower marginally higher with the France yields up 2.1 basis points. Spain, Italy, Portugal yields are lower with Portugal down -2.5 basis points
For the week, the major indices closed sharply higher with the German DAX leading the way with a 5.8% gain:
- German DAX, 5.8%
- France’s CAC, +3.8%
- UK’s FTSE 100, +3.3%
- Spain’s Ibex, +3.3%
- Italy’s FTSE MIB, +2.6%
But off lowest levels for the day
The major European indices are ending the session lower, but off the lowest levels of the day. The provisional closes are showing:
- German DAX, -1.4%
- France CAC, -1.2%
- UK’s FTSE, -0.8%
- Spain’s Ibex, unchanged
- Italy’s FTSE MIB, -0.8%
In the debt market, the benchmark 10 year yields are ending the session lower. With the UK yield down -5.5 basis points.
German DAX rises 1.5%. France’s CAC up 0.9%
The major European indices are closing higher and in the process reversed earlier session lows. Provisional closes are showing:
- German DAX, +1.5%. The low extended to -0.87%
- France’s CAC +0.9%. The low extended to -1.39%
- UK’s FTSE, +1.2%. The low extended to -0.68%
- Spain’s Ibex, +1.2%. The low extended to -1.66%
- Italy’s FTSE MIB, +1.1%. The low extended to -2.11%
In the European debt market, the benchmark 10 year yields are ending the session lower. The biggest decline are was France at -1.7%. It moved above the 0.0% level at the highs today (high yield reached 0.002%). Buyers came in and pushed yield down into the close (trading at -0.033%).
In the UK today, the treasurysold £3.8bn of three-year gilts at a yield of -0.003%. That was the first sale below 0% in the UK as investors look for further declines in UK rates as the battle Brexit and coronavirus headwinds.
Bank of England’s governor Bailey said that the challenge for the central bank is getting inflation to return to target.