Archive

Daily Archives: 8th May 2019

8th May 2019

All’s fair in love and war

MARKET CLOSE:
iTraxx Main

62.5bp, +1bp

iTraxx X-Over

266.9bp, +0.9bp

🇩🇪 10 Yr Bund

-0.04%, unchanged

iBoxx Corp IG

B+128.4bp, +4bp

iBoxx Corp HY

B+425.5bp, +10bp

🇺🇸 10 Yr US T-Bond

2.47%, +2bp

🇬🇧 FTSE 100

6144.25, (+1.26%)
🇩🇪 DAX

11657.69, (+1.33%)
🇺🇸 S&P 500

3036.13, (+0.74%)

Trump’s position of strength…

We can suppose that, as it stands, the markets are having one of those ‘we don’t know what to do’ moments. Trade negotiations are about to begin, but a positive outcome is far from certain as the Trump administration ramps up the pressure. And he was at it again with an accusatory tweet aimed at the Chinese and the Democrats. Trump is emboldened at the moment by the relative – and in some cases – surprising strength and resilience of the domestic economy.

And so what if the S&P is a couple of percentage points off its record high? He is refusing to blink while the Chinese have so much skin in the game that they might have to yield first. Either way, the markets have backed off, and are waiting for the next tweet for a sign as to where the whole trade tariff situation is heading.  At best, they will try to tread water albeit with much struggle (not a risk-off environment).

Continue reading