19 April 2017. Daily Market Updates

Headlines-International
headlines
U.S. stocks followed European equities down Tuesday while the pound soared after British Prime Minister Theresa May called for surprise early elections to strengthen her hand in Brexit negotiations.
British Prime Minister Theresa May called a surprise early general election for June 8 aimed at strengthening her hand in her country’s critical divorce negotiations with the European Union.Mrs. May is betting the election will deliver her a big increase in her slim majority in the House of Commons, reducing her dependence on the few-dozen lawmakers who want a sharp and rapid break from the EU and improving the prospect for a smoother exit with less economic disruption.
The pound extended gains soon after Deutsche Bank changed its call. It was trading 1.4 percent higher to $1.2741 as of 3 p.m. in London, the highest since Dec. 6. The currency fell to as low as $1.1841 last year, the weakest since 1985. Sterling reaches strongest this year as May calls for election. Announcement could be a game changer for the pound says some analyst. Article attached here.
Oil prices closed lower on Tuesday, weighed down by concerns over increasing global supply. Light, sweet crude for May delivery settled down 24 cents, or 0.5%, at $52.41 a barrel on the New York Mercantile Exchange, after swinging between gains and losses throughout the session. Prices closed at the lowest level since April 7. Brent, the global benchmark, fell 47 cents, or 0.8%, to $54.89 a barrel. U.S. oil futures slipped after Saudi Arabia’s energy minister said it is too early to decide whether the Organization of the Petroleum Exporting Countries will extend production cuts for the rest of the year.
Industrial metals plunged as traders capitulated amid stock market declines and skepticism surrounding the outlook for commodity demand from China and the U.S. Metals have pulled back in the past two months, after surging last year, as investors question the boost from President Donald Trump’s infrastructure spending plans and the sustainability of Chinese demand growth.
IMF raises Global Forecast while warning of protectionism threat. The IMF raised its forecast for global growth to 3.5% this year, up 0.1ppt from January; expansion will pick up to 3.6% in 2018, unchanged from the projection three months ago
China’s shadow banking is back in full swing, an unintended side effect of the government’s campaign against financial leverage, which has curbed traditional lending and squeezed bond financing.Data from the central bank Friday showed that off-balance sheet lending surged 754 billion yuan ($109 billion) in March, taking the first quarter’s total increase to a record 2.05 trillion yuan. Efforts by the People’s Bank of China to curb fresh lending may have prompted borrowers, especially real estate developers, to resort to alternative forms of financing.
If yield is a drug, Wall Street’s working overtime to supply it. Investors’ global reach for income is giving America’s largest banks their biggest surge in risky-loan sales on record. Goldman Sachs Group Inc. and Bank of America Corp. on Tuesday joined JPMorgan Chase & Co. and Citigroup Inc. in reporting first-quarter gains of almost 40 percent in underwriting revenues.
The flow of money in the $17 trillion mutual-fund industry in recent weeks is signaling that investors across asset classes are increasingly skeptical of the reflation trade. From global equities to U.S. municipal debt, fund flows have changed course relative to the post-election stretch when investors wagered that stronger growth and inflation would lift stocks and bond yields.
Beware the rally in emerging-market currencies: the best quarterly performance in almost seven years is about to reverse. That’s the message from the forecaster of developing-nation Asian currencies last quarter: Wells Fargo & Co. Article can be found here.
Market in details
FX :
The Bloomberg Dollar Spot Index fell 0.48 percent.
The pound was 2.22 percent higher at 1.2844. The euro rose 0.85 percent to $1.0734.
AUD/USD trading near session lows as attempt to sustain a rally above 0.7600 fails. The collapse of iron ore prices by more than 30% since the end of March has kept AUD in check
NZD/USD holding gains near session highs, range 0.7057USD/JPY extended losses from Europe’s session, holding solidly below the 200-DMA into the close
Rates :
Australia’s government bonds open higher, tracking Treasuries which rose as markets continue to be driven by declining expectations for U.S. tax reform as well as geopolitical concerns.
Australia’s 3-year yield falls 2bps to 1.73%. 10-year yield declines 4bps to 2.45%
The yield on 10-year Treasuries fell nearly eight basis points to 2.17 percent
U.K. 10-year bond yields slipped 3 basis points at 1.014.
Equities :
U.S. stocks followed European equities down Tuesday while the pound soared after British Prime Minister Theresa May called for surprise early elections to strengthen her hand in Brexit negotiations.
The Nasdaq 100 Stock Index slipped 0.14 percent, while the Russell 2000 Index rose 0.05 percent.
The Stoxx Europe 600 Index slumped 1.1 percent, led by commodity producers. The Paris CAC 40 Index dropped 1.6 percent, the most since September.
Commodities :
Gold was flat at $1,291.90 an ounce.
West Texas Intermediate crude dipped 0.09 percent to $52.60 a barrel, after dropping 1 percent on Monday.
Iron ore futures continued their slide, losing more than 6 percent since Monday. London Metal Exchange zinc for delivery in three months declined 3.8 percent and nickel fell 4.5 percent.
Regards All.
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