Daily Market Updates 25 January 2017

coffe19International Headlines:
ECB’s lautenschlaeger would like talks soon on gradual QE exit, as ECB can soon turn to “question of an exit” as inflation outlook is improving
A UK supreme court has ordered Theresa May to hold a parliamentary vote before she triggers Article 50 to start divorce proceedings with the EU
USD recouped morning losses and UST yields rose as market began searching for next theme post-Trump inauguration and Brexit court ruling;
U.K. avg daily trading vol. fell 2% to $2.18t in October from April; North American trading fell 1.3% to $881.3b; Tokyo vol. fell 5.1%
Trump promising to rebuild infrastructure, states have begun submitting lists of priority projects for funding.
Trump pins keystone and Dakota pipeline fate on renegotiation. Trump foreshadowed a “renegotiation” of terms and stopped short of green lighting either project, saying they should use U.S.-made components; separately, Trump met with auto CEOs and offered incentives to attract new factories to the U.S.
Fx Market:
Bloomberg dollar index was up ~0.1%. USD gained vs all G-10 peers
Pound whipsawed after U.K. court said Parliament must approve implementation of Article 50.
CAD also gained as Trump advanced Keystone pipeline, while USD/JPY rose amid gaisn in UST yields and stocks
Rates:
Core EGBs were weighed by supply with declines accelerating into close amid pricing for 20Y France, 10Y Spain; bonds briefly bounced as gilts rallied after BOE buyback in long end
UST yields up ~5bp or more across the curve. 10-year rose six basis points to 2.46 percent, reversing a seven basis-point drop on Monday.
Equities:
Euro stocks rose for the first time in four days as miners rallied; Stoxx Europe 600 Index was +0.3%, FTSE 100 little changed
S&P 500 and Nasdaq Composite rose to records amid renewed focus on infrastructure spending
Commodities:
Tuesday’s $26 billion two-year U.S. note sale drew a yield of 1.21 percent, above the level indicated before the auction.
Gold futures fell 0.4 percent to settle at $1,210.80 after closing Monday at a two-month high.
Oil rose 0.8 percent to settle at $53.18 a barrel in New York, the highest close since Jan. 6. Iraq said it’s close to implementing its share of pledged output curbs as part of OPEC’s effort to trim bloated global inventories.
Regards All.
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