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Global Forex and Fixed Income Roundup: Market Talk
TRADING CENTRAL / DOW JONES 5 MIN AGO
Mon Oct 15 03:01:00 2018
The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0701 GMT - The yield on Portugal's 10-year government bond is trading slightly lower, moving in line with the rest of the eurozone. The small drop in bond yields--which move inversely to prices--is also helped by the fact that an upgrade by Moody's Investors Service by one notch to Baa3 on Friday means Portugal now has an investment grade rating from all the four major ratings firms. Danske Bank analysts say the upgrade should help broaden the investor base and be supportive for Portuguese government bonds. Portugal's 10-year government bond yield is trading at 2.04%, down 0.6 basis points, according to Tradeweb. ([email protected]; @emeseBartha)
0654 GMT - The Nikkei more than reversed Friday's modest gain to close at an 8-week low. Leading declines in Asia, the index fell 1.9% to 22271.30, putting this month's slide at 7.7%. Even without any further declines in the second half of October, it would be the Nikkei's worst month since June 2016. This compares with the index's record 16-straight days of gains last October. Among the standouts Monday was SoftBank, which fell 7.3% to notch its biggest drop since mid-2016. The dollar was at Y111.90 at Tokyo's stock market close versus Y112.17 at the open, and 10-year JGB yields have fallen half a basis point to 0.140%. ([email protected]; @kevinkingsbury)
0650 GMT - London stocks are expected to open 15 points higher at 7,010 points, according to London Capital Group. This is despite rising concerns over a fresh stalemate in Brexit negotiations after Prime Minister Theresa May said the U.K. could not sign a draft deal ahead of the EU summit on Wednesday. "With higher oil prices owing to Saudi Arabian tensions and Brexit hitting the pound, the FTSE is managing to buck the trend of its European peers," says Jasper Lawler of LCG. U.S.-China trade tensions, Brexit, Italy's budget-proposal submission today and increased political tensions between the U.S. and Saudi Arabia are set to keep pressure on risk appetite this week, he adds. ([email protected]; @lorena_rbal)
0645 GMT - ING says bond yields may continue to slide, as German Bund yields and government bonds elsewhere in the eurozone fall. The 10-year Bund yield is trading two basis points lower at 0.49%, according to Tradeweb. The economic data calendar is light but government bond supply will be significant this week, amounting to around EUR20 billion, although redemptions will amount to around EUR30 billion. "With the rating actions on Italy drawing near, equities (still) looking fragile and the U.S.-China trade war showing no signs of slowing, yields might retreat further near term," say ING's rates strategists. ([email protected]; @emeseBartha)
0634 GMT - TD Securities' base case remains that Moody's Investors Service will downgrade Italy one notch to Baa3 with a negative outlook. They reckon that a single-notch downgrade by Moody's is "well embedded" into the credit premium of Italian government bonds, or BTPs. Therefore, TD Securities expects that even after such a downgrade, the 10-year BTP-Bund spread should stabilize around 280 bps to 300 bps. It expects S&P Global Ratings to maintain Italy at BBB but assign a negative outlook. "The slower shift from S&P allows markets to delay greater concerns," TD Securities says. The 10-year BTP-Bund yield spread stands at 308 bps, up 2 bps, according to Tradeweb. ([email protected]; @emeseBartha)
0628 GMT - Bitcoin prices have spiked 6.5% the past hour, jumping above $6,600. While the catalyst behind the move higher for the world's largest cryptocurrency by market value isn't immediately clear, what is is bitcoin withstanding much of the world's broader-market volatility this month. The S&P 500 is down 5%, the MSCI Emerging Market Index has fallen 6.4% and Chinese stocks have slumped even more. Meanwhile, bond prices have dropped and currencies like the yuan have slid. Few are ready to label bitcoin a true store of value in times of turmoil, but it has held up better than most of late in currently standing at end-of-September levels. The entire cryptocurrency market has only fallen slightly. For sure, perspective is everything: Bitcoin is still down more than 50% for the year. ([email protected]; @srussolillo)
0622 GMT - The European Commission will voice a negative opinion on Italy's 2019 budget proposal, according to Danske Bank's base case. The bank's analysts also expect the EC to ask Italy for a budget revision, they say, ahead of the Italian government's submission of next year's budget proposal, scheduled for today. In case a revision is requested, the Italian authorities will have three weeks to comply. ([email protected]; @emeseBartha)
0621 GMT - Portugal received good rating news on Friday when Moody's Investors Service upgraded the country's credit rating by one notch to Baa3, changing the outlook to stable from positive, while DBRS confirmed the rating at BBB with a stable trend. Moody's move means Portugal now has an investment grade rating from Moody's, S&P Global Ratings, Fitch Ratings and DBRS. The drivers for the upgrade by Moody's include the facts that Portugal's elevated general government debt has moved to a sustainable, albeit gradual, downward trend with limited risks of a reversal and that a structurally improved external position has proved the country's economic resilience. Portugal has been on an improving ratings path as it has made great efforts to consolidate its finances following a three-year economic adjustment program that ended in June 2014. ([email protected]; @emeseBartha)
0552 GMT - Australia's unemployment rate at 5.3% remains above the natural rate of unemployment estimated by the RBA at 5.0%. Ian Harper, a member of the RBA's board says in an interview it is a big stumbling block to raising interest rates. Elsewhere, he says the economy is getting a tailwind from the lower Australian dollar, w1hich has been in steady decline for some time, despite a widening interest rate differential between the U.S. and Australia. ([email protected]; Twitter @jamesglynnWSJ)
0544 GMT - Germany's DAX and France's CAC 40 are both set to start the week slightly lower, says Jasper Lawler of London Capital Group, as the Italian budget drama that has captivated investors in recent weeks is set to continue being the center of attention. Rome is continuing to push for heavy spending with a deficit far beyond what European Union rules permit, pushing Italy's borrowing costs up to their highest in four years. "A full-on clash with the EU is expected to push Italian borrowing costs up higher and lower demand for the euro," says Mr. Lawler. ([email protected]; @anthony_shevlin)
0532 GMT - Indonesia's $230 million trade surplus last month, coming after a $1.02 billion deficit in August, is the first in 3 months and could be the only one for a spell. That's because imports and Indonesia's economic activity typically picks up in 4Q, which will likely impact the country's current-account balance, notes Bahana economist Putera Satria. Indonesian stocks rebounded from session lows after the midday release of the trade figures, with the Jakarta Composite Index finishing the morning up 0.2%. ([email protected])
0527 GMT - Doubts about the resilience of Australian consumers continues to create doubt in the mind of the RBA, according to Ian Harper, a member of its board. In an interview with the Wall Street Journal, Harper says it remains more likely that interest rates will rise next than fall, but adds that it wouldn't take much of a slowdown in consumer spending to be felt across the economy, so more growth in incomes is needed to bolster confidence among policy makers.([email protected]; Twitter @jamesglynnWSJ)
(END) Dow Jones Newswires
October 15, 2018 03:01 ET (07:01 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
TRADING CENTRAL / DOW JONES 5 MIN AGO
Mon Oct 15 03:01:00 2018
The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0701 GMT - The yield on Portugal's 10-year government bond is trading slightly lower, moving in line with the rest of the eurozone. The small drop in bond yields--which move inversely to prices--is also helped by the fact that an upgrade by Moody's Investors Service by one notch to Baa3 on Friday means Portugal now has an investment grade rating from all the four major ratings firms. Danske Bank analysts say the upgrade should help broaden the investor base and be supportive for Portuguese government bonds. Portugal's 10-year government bond yield is trading at 2.04%, down 0.6 basis points, according to Tradeweb. ([email protected]; @emeseBartha)
0654 GMT - The Nikkei more than reversed Friday's modest gain to close at an 8-week low. Leading declines in Asia, the index fell 1.9% to 22271.30, putting this month's slide at 7.7%. Even without any further declines in the second half of October, it would be the Nikkei's worst month since June 2016. This compares with the index's record 16-straight days of gains last October. Among the standouts Monday was SoftBank, which fell 7.3% to notch its biggest drop since mid-2016. The dollar was at Y111.90 at Tokyo's stock market close versus Y112.17 at the open, and 10-year JGB yields have fallen half a basis point to 0.140%. ([email protected]; @kevinkingsbury)
0650 GMT - London stocks are expected to open 15 points higher at 7,010 points, according to London Capital Group. This is despite rising concerns over a fresh stalemate in Brexit negotiations after Prime Minister Theresa May said the U.K. could not sign a draft deal ahead of the EU summit on Wednesday. "With higher oil prices owing to Saudi Arabian tensions and Brexit hitting the pound, the FTSE is managing to buck the trend of its European peers," says Jasper Lawler of LCG. U.S.-China trade tensions, Brexit, Italy's budget-proposal submission today and increased political tensions between the U.S. and Saudi Arabia are set to keep pressure on risk appetite this week, he adds. ([email protected]; @lorena_rbal)
0645 GMT - ING says bond yields may continue to slide, as German Bund yields and government bonds elsewhere in the eurozone fall. The 10-year Bund yield is trading two basis points lower at 0.49%, according to Tradeweb. The economic data calendar is light but government bond supply will be significant this week, amounting to around EUR20 billion, although redemptions will amount to around EUR30 billion. "With the rating actions on Italy drawing near, equities (still) looking fragile and the U.S.-China trade war showing no signs of slowing, yields might retreat further near term," say ING's rates strategists. ([email protected]; @emeseBartha)
0634 GMT - TD Securities' base case remains that Moody's Investors Service will downgrade Italy one notch to Baa3 with a negative outlook. They reckon that a single-notch downgrade by Moody's is "well embedded" into the credit premium of Italian government bonds, or BTPs. Therefore, TD Securities expects that even after such a downgrade, the 10-year BTP-Bund spread should stabilize around 280 bps to 300 bps. It expects S&P Global Ratings to maintain Italy at BBB but assign a negative outlook. "The slower shift from S&P allows markets to delay greater concerns," TD Securities says. The 10-year BTP-Bund yield spread stands at 308 bps, up 2 bps, according to Tradeweb. ([email protected]; @emeseBartha)
0628 GMT - Bitcoin prices have spiked 6.5% the past hour, jumping above $6,600. While the catalyst behind the move higher for the world's largest cryptocurrency by market value isn't immediately clear, what is is bitcoin withstanding much of the world's broader-market volatility this month. The S&P 500 is down 5%, the MSCI Emerging Market Index has fallen 6.4% and Chinese stocks have slumped even more. Meanwhile, bond prices have dropped and currencies like the yuan have slid. Few are ready to label bitcoin a true store of value in times of turmoil, but it has held up better than most of late in currently standing at end-of-September levels. The entire cryptocurrency market has only fallen slightly. For sure, perspective is everything: Bitcoin is still down more than 50% for the year. ([email protected]; @srussolillo)
0622 GMT - The European Commission will voice a negative opinion on Italy's 2019 budget proposal, according to Danske Bank's base case. The bank's analysts also expect the EC to ask Italy for a budget revision, they say, ahead of the Italian government's submission of next year's budget proposal, scheduled for today. In case a revision is requested, the Italian authorities will have three weeks to comply. ([email protected]; @emeseBartha)
0621 GMT - Portugal received good rating news on Friday when Moody's Investors Service upgraded the country's credit rating by one notch to Baa3, changing the outlook to stable from positive, while DBRS confirmed the rating at BBB with a stable trend. Moody's move means Portugal now has an investment grade rating from Moody's, S&P Global Ratings, Fitch Ratings and DBRS. The drivers for the upgrade by Moody's include the facts that Portugal's elevated general government debt has moved to a sustainable, albeit gradual, downward trend with limited risks of a reversal and that a structurally improved external position has proved the country's economic resilience. Portugal has been on an improving ratings path as it has made great efforts to consolidate its finances following a three-year economic adjustment program that ended in June 2014. ([email protected]; @emeseBartha)
0552 GMT - Australia's unemployment rate at 5.3% remains above the natural rate of unemployment estimated by the RBA at 5.0%. Ian Harper, a member of the RBA's board says in an interview it is a big stumbling block to raising interest rates. Elsewhere, he says the economy is getting a tailwind from the lower Australian dollar, w1hich has been in steady decline for some time, despite a widening interest rate differential between the U.S. and Australia. ([email protected]; Twitter @jamesglynnWSJ)
0544 GMT - Germany's DAX and France's CAC 40 are both set to start the week slightly lower, says Jasper Lawler of London Capital Group, as the Italian budget drama that has captivated investors in recent weeks is set to continue being the center of attention. Rome is continuing to push for heavy spending with a deficit far beyond what European Union rules permit, pushing Italy's borrowing costs up to their highest in four years. "A full-on clash with the EU is expected to push Italian borrowing costs up higher and lower demand for the euro," says Mr. Lawler. ([email protected]; @anthony_shevlin)
0532 GMT - Indonesia's $230 million trade surplus last month, coming after a $1.02 billion deficit in August, is the first in 3 months and could be the only one for a spell. That's because imports and Indonesia's economic activity typically picks up in 4Q, which will likely impact the country's current-account balance, notes Bahana economist Putera Satria. Indonesian stocks rebounded from session lows after the midday release of the trade figures, with the Jakarta Composite Index finishing the morning up 0.2%. ([email protected])
0527 GMT - Doubts about the resilience of Australian consumers continues to create doubt in the mind of the RBA, according to Ian Harper, a member of its board. In an interview with the Wall Street Journal, Harper says it remains more likely that interest rates will rise next than fall, but adds that it wouldn't take much of a slowdown in consumer spending to be felt across the economy, so more growth in incomes is needed to bolster confidence among policy makers.([email protected]; Twitter @jamesglynnWSJ)
(END) Dow Jones Newswires
October 15, 2018 03:01 ET (07:01 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.