Market Talk – Tuesday, March 13

A pretty mixed bag for Asia today with most core indices playing around unchanged for much of the day. The late weakness in the DOW obviously didn’t help confidence but then futures are bouncing back in Asian trading. The talk surrounding US tariffs still add a dampener on the Asian producers and that may be a reason the commodity economies are lagging a touch. The Nikkei played either side then eventually rallied at the close after the Yen strayed closer to the 107 handle than 106. The Nikkei ended the day +0.7% whilst the talk concerning an unsettled government continues. The Shanghai drifted for much of the day but only to close at the days low (-0.5%).

The departure of Rex Tillerson hit the European markets more than it did the US! The DAX, CAC and FTSE were all around 1% lower with the lows being hit towards the close of trading. FTSE lost after the UK Chancellor, Hammond addressed Parliament for the Spring Outlook and announced a marginally better growth outlook which hit markets, but at the same time lifted Sterling (+0.4%). The Euro was also better bid against the USD following the Tillerson announcement and the rather tame inflation print.

US indices made strong gains in early session with the DOW up nearly 200 points at one stage. However, as we know now this was not to last and nerves surrounding the continued trade war talk, profit taking in the tech sector and a pick-up in volume trades into the close. The eventual result was all indices ending at their lows lower by around -0.75%. The market remains volatile and in lighter volume than normal for this time of the year. We do have the Fed next week, but having seen todays inflation number the market is less concerned about the speed of potential hikes. President Trump did say he would operate a none traditional White House. Guess the only thing surprising people is a candidate fulfilling what he said he would do.

Japan 0.04%, US 2’s closed 2.25% (-1bp), 10’s 2.84% (-2bp), 30’s 3.10% (-2bp), Bunds 0.61% (-2bp), France 0.86% (-1bp), Italy 1.98% (-1bp), Greece 4.10% (-2bp), Turkey 12.22% (-2bp), Portugal 1.78% (-2bp), Spain 1.38% (u/c), and Gilts 1.49% (u/c).