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Weekly Market Focus - 18 March 2019

Markets

WEEKLY FOCUS: Will the German Manufacturing PMI recover this week?                                         18 March 2019
 

 

 

Wall Street had its best week in 4 months and carried all major global bourses in Europe and Asia higher. The DAX, CAC40 and S&P500 reached their highs of the year with a supportive dollar index which lost 70 basis points over the week as the yen remained little changed and the pound benefitted from a likely delay of Brexit. Long term yields in the US remained below 2.60% as data on industrial production was softer than expected.  

 

The deadline for extension of Brexit is still blurred as reports leaked in the Financial Times over the week-end indicate the European Commission would not be inclined to offer an extension beyond the 30th of June as new members of parliament must take their seats on 2nd July and this could place the validity of commercial contracts at risk.   

 

The US FOMC meeting is the main event of the week as the interest rate expectations (dot-plots) should be more dovish. Whilst the market view from the Fed Futures rates indicate no hike expectation, 11 governors were hawkish in December and we might well end up with a slightly hawkish dot-plot as they take their time to reverse gear.

 

The anticipated meeting between the US and Chinese Premiers on the trade dispute resolution has been deferred by a couple of months as there is no agreement yet on the dispute resolution mechanism; the US would like to reserve the right to retaliate with sanctions rather than have an independent assessment panel.

 

The Flash Markit PMIs are eagerly awaited for signs of an improvement in Europe. The German index fell 11 times in 12 last year and went below the 50 boom/bust level this year (chart above). An improvement is now forecast after industrial production data surprised on the upside and this could boost the Eurodollar towards the 1.14 level.

 

 

Value

Week

YTD

Equity Indices

 

 

 

S&P500

2,822

2.89%

13.55%

S. Africa

3,386

0.95%

4.28%

Euro Stoxx50

3,386

3.12%

12.82%

FTSE100

7,228

1.74%

7.34%

DAX

11,686

1.99%

10.67%

CAC40

5,405

3.33%

15.53%

Swiss Mkt.

9,483

2.32%

12.50%

FTSE MIB

21,045

2.74%

14.85%

Shanghai Comp

3,022

1.75%

21.17%

BSE Sensex

38,024

3.69%

5.40%

Nikkei

21,451

2.02%

7.18%

Major currencies

 

 

 

USDZAR

14.41

-0.17%

-0.11%

EURUSD

1.13

0.76%

-0.99%

GBPUSD

1.33

2.10%

4.60%

USDCHF

1.00

-0.61%

1.79%

EURCHF

1.13

0.15%

0.73%

USDJPY

111.47

0.27%

1.08%

EURGBP

0.85

-1.34%

-5.39%

USDAUD

1.41

-0.59%

-0.66%

Dollar Index

96.59

-0.70%

0.65%

 Commodities 

 

 

 

Brent

67.16

2.16%

28.66%

WTI Oil

58.52

4.37%

29.10%

Copper

2.90

0.35%

8.28%

Aluminum

 1,886.50

1.79%

2.18%

Platinum

831.80

1.58%

5.26%

Sugar

12.52

2.79%

1.05%

Corn

373.25

5.21%

-0.60%

Coffee

97.65

2.47%

-3.27%

Gold

 1,302.90

0.28%

1.05%

Cotton

75.51

2.97%

4.48%

 Sovereign Yields

 

 

 

US10Y

2.59

(0.04)

(0.13)

UK10Y

1.21

0.02

(0.06)

Germany10Y

0.08

0.01

(0.15)

 
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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
 

 



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