Market Talk – October 21, 2015

Although the trade numbers from Japan were below forecasters projections the street was abuzz with speculation of further BOJ intervention and so we saw the Nikkei close up 2% today. The same could not be said for Shanghai (closed down 3.5%) whilst the HSI was closed for a public holiday. European Indices really could not decide on direction but after a shaky start the DAX did mange to close up almost 1%. Both FTSE and CAC were in and out of positive ground all day both eventually closing better but only marginally. This is big earnings season and so far results have not been that great. The Dealers we spoke with today are all of the opinion cash is king at the moment and not time to be a hero. The street is running scared of a big move as market positions are being wound-down.

Oil had yet another weak trading session with continued concerns over additional supplies and rising stockpiles. The TWI flirted with $45 (-2.4%) in most of the days trading whilst Brent fell 1.8%  to close $47.85. Gold and Silver were also weak today losing 0.9% and 1.5% respectively.

The main performers today were the Bond markets. The US Treasury market saw buyers of long dated paper and so saw the curve flatten. 2’s trod water around 0.63% whilst 10’s and 30’s were both better by 4 and 5bp respectively. 10’s remain just above the psychological 2% level still (closing at 2.02%) which put the TY/RX spread at +144bp.

On the FX side of business the US Dollar has started its march yet again. The talk in the America was of the CAD breaking back above the 1.30 level again (last seen at 1.3132 (-1.2%)) and fears that the previous high of Sept 21st will be breached! The A$, Rouble, Zloty, Brazilian Real and HUF all lost ground to the US Dollar again. The DXY closed +0.2% at 95.10.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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