Home Market wrap: equities down, USD was the best performer – ANZ
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Market wrap: equities down, USD was the best performer – ANZ

In a market wrap, analysts at ANZ Bank New Zealand explained that the European equities finished the day lower, with the DAX down 0.3%, the CAC 40 off 0.6%, and the FTSE 100 down 0.1%.

Key Quotes:

“US markets opened lower as well, with the Dow Jones down 0.5% at the time of writing and the S&P 500 down 0.2%, but the Nasdaq up 0.4% boosted by the FANG heavy-hitters ahead of earnings results this week.

Sovereign bonds generally rallied to start the week, with UK 10-year Gilt yields down 5bp, Spanish government bond yields down 3bp, but Italy’s BTP yields up 1bp. In the US, 10-year Treasury yields were flat.

In currencies, the USD was the best performer, while the GBP underperformed. Oil prices were lower, with WTI spot off 0.25% at USD68.95/bbl. Gold was softer at USD1222, down 0.4%.”

Data event pulse

Italy’s bonds steady:

“Italian government bonds rallied to open the session, following Moody’s announcement that it will maintain them at investment grade, increasing the likelihood that they will remain above junk status for the foreseeable future (S&P will reviews its rating of BTPs on Friday). However, the move was later retraced. A letter from Italian finance minister Tria to the EC was published, arguing the need for dialogue, while on a conciliatory note, PM Conte indicated that the 2.4% deficit target is the upper limit and his Government doesn’t intend to exceed it.”

Sterling  takes a pounding:

“The sterling fell to its lowest value in two weeks on Monday, following the weekend news that the Eurosceptic parts of the Conservative party are becoming increasingly frustrated with how PM May is handling the Brexit negotiations. Amid the speculation about a leadership challenge, PM May addressed Parliament about the conditions under which a negotiation extension would be needed. This failed to calm markets though, and the sterling is not far off session lows at time of writing.”

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