Not a member? Register | Lost your password?

Weekly Market Focus 16 July 2018

Markets

WEEKLY FOCUS                                                                            16 JULY 2018

There is some debate about whether the 26% fall since February of the Shanghai Composite index is solely because of the trade dispute with the US. As we know the Asian giant has been rebalancing its economy away from exports to domestic consumption while maintaining some degree of financial market stability since the financial crisis of 2009.

 

As the global economy slowed down and the US central bank started raising rates in 2015, other G20 central bankers informally agreed to stimulate their economies in February 2016 in what was termed as the Shanghai accord. The Chinese central bank raised its open market operations and fiscal incentives were also implemented to boost consumption and a rise in GDP growth and equity indices followed. However higher comparative growth bases made sequential progress harder recently and hence equity indices retraced on this basis.

 

The effect of a trade war is difficult to analyse as the quantum and timing of the impact and nature for each specific scenario of elasticity of demand and supply on savings and investment rate to GDP, balance of payments, unemployment etc. are so diverse. As the issuer of the global reserve currency and absorber of global savings, the US has to run a capital account surplus whose counterparty is a current account deficit.

 

However  savings and investment imbalances in surplus countries are challenged in a trade war and this should be beneficial to the global economy in the long run.

 

Value

Week

YTD

Equity Indices

 

 

 

S&P500

2,801

1.50%

4.78%

S. Africa

3,459

-1.32%

-8.76%

FTSE100

7,662

0.58%

-0.34%

DAX

12,541

0.36%

-2.92%

CAC40

5,429

0.99%

2.20%

Swiss Mkt.

8,861

1.88%

-5.55%

FTSE MIB

21,892

-0.15%

0.18%

Shanghai Comp

2,831

3.06%

-14.39%

BSE Sensex

36,542

2.48%

7.30%

Nikkei

22,597

3.71%

-0.74%

Major currencies

USDZAR

13.27

-1.51%

7.23%

EURUSD

1.17

-0.52%

-2.60%

GBPUSD

1.32

-0.37%

-2.06%

USDCHF

1.00

1.19%

2.80%

EURCHF

1.17

0.68%

0.15%

USDJPY

112.38

1.74%

-0.28%

EURGBP

0.88

-0.15%

-0.55%

USDAUD

1.35

0.25%

5.22%

Dollar Index

94.44

0.71%

2.84%

Commodities

Brent

74.86

-2.92%

11.95%

WTI Oil

70.56

-4.39%

16.78%

Copper

2.78

-1.28%

-15.34%

Aluminum

 2,039.75

-2.12%

-10.36%

Platinum

831.70

-1.81%

-11.01%

Sugar

0.93

-5.04%

-27.90%

Corn

340.25

-3.27%

-2.99%

Coffee

109.97

-1.15%

-12.86%

Gold

1,241.80

-1.00%

-5.16%

Cotton

87.86

4.14%

11.97%

Sovereign Yields

 

 

 

US10Y

2.83

0.01

0.42

UK10Y

1.27

0.00

0.08

Germany10Y

0.28

(0.02)

(0.14)

 

 

 

 

Contact us: DBN +27 ( 0 ) 31 566 3365 | CPT +27 ( 0 ) 21 851 0920 | JHB +27 ( 0 ) 11 017 7230 | Email:enquiries@pegasuswm.com
Disclaimer: The research report has been prepared for information purposes and does not constitute an offer. While reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and the company accepts no liability whatsoever for any direct or consequential loss, including without limitation any loss of profits, arising from reliance on this report.
 

 



Twitter
Facebook
Connect with us