Narrative In Financial Markets
Disappointing UK data ( misses by 1 bp) alongside no clarity in the Brexit front, keep the offered outright throughout Tuesday. UK PM Theresa May is scheduled to meet EC President Juncker on Thursday with very low expectations for a real breakthrough. Fears are on the rise that an election or UK PM May resignation may be on the horizon as the Brexit deadline approaches with the UK in need for more time that they simply don’t have. US equities keep extending gains for the 5th day in a row, with the the outperformer, accumulating near to 20% gains since the bottom in late December. In an even stronger fashion, European equities found strong demand, with earnings backing the moves. navigates Tuesday’s seas with surprising firmness despite the notable decline in US government bond yields and a poor US print (56.7 vs 57.1), in which new export orders was the main laggard amid a global slowdown in trade activity. The was the main mover on Tuesday, alongside the GBP, after the RBA kept its rates unchanged at 1.5% in what appears to be a rather complacent approach given the mounting evidence of headwinds into the real economy. Tuesday’s Aus retail sales (-0.4%) was yet again another disastrous read not boding well for the Australian economy. The spike in the Aussie came mainly in response to a squeeze in short positions after the RBA failed to blink. UPDATE: RBA’s Lowe has changed that today.
Headlines around the US-China trade negotiations have logically slowed down as China celebrates its golden week (new year). But there is no time to waste for the US, and a US Treasury report in Congress states that it intends to ‘hold China accountable’ for unfair, market-distorting trade practices, which sounds like a