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Daily Archives: 16th January 2019

16th January 2019

Change in the air…Not

MARKET CLOSE:
iTraxx Main

78.1bp, -2.6bp

iTraxx X-Over

326.6bp, -7.2bp

🇩🇪 10 Yr Bund

0.22%, +2bp

iBoxx Corp IG

B+174.8bp, -3bp

iBoxx Corp HY

B+505bp, -11bp

🇺🇸 10 Yr US T-Bond

2.73%, +2bp

🇬🇧 FTSE 100

6050.59, (+0.31%)
🇩🇪 DAX

12687.53, (+0.10%)
🇺🇸 S&P 500

3360.47, (+0.20%)

The status quo won’t cut it…

BoE Governor Mark Carney

The BoE’s Carney was again doing his best to talk up the benefits of no Brexit after that humiliating vote on Tuesday, but that we expect from the establishment. No one knows where this will lead to, but on we go. May’s agreed deal with the EU spectacularly failed the Westminster test, just as we expected.

On Wednesday she won her vote of no confidence, also as expected. The EU has thus far refused to budge and extend any kind of an olive branch. They will only be judged as being good negotiators if they manage to eventually get a deal close to the one currently agreed. Anything else, because of ‘the process’, stubbornness and/or a failure to yield might ultimately have severe repercussions for the EU (we think economic and existential risks even). The markets didn’t really react though save for a bit of volatility around sterling, which will have passed most by. The concern for most remains global macro.

So that big drop in new car registrations in December (-8.4% after -8% in November) doesn’t bode well on the demand front from such an economically important industrial sector and suggests we are in for an extended period of economic weakness.

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