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Daily Archives: 23rd September 2019

23rd September 2019

The numbers don’t lie

iTraxx Main

55.5bp, +1.3bp

iTraxx X-Over

224.0bp, +8.4bp

🇩🇪 10 Yr Bund

-0.58%, -6bp

iBoxx Corp IG

B+124bp, +1.5bp

iBoxx Corp HY

B+401bp, +7bp

🇺🇸 10 Yr US T-Bond

1.70%, -5bp

🇬🇧 FTSE 100

6154.34, ERROR
🇩🇪 DAX

12946.89, (+2.04%)
🇺🇸 S&P 500

3333.69, (+0.54%)

We’re in recession…

The opening session of the week was a ‘run for the hills’ moment. Not such a bad thing for fixed income markets with that rally in safe havens. There was unrest in Hong Kong again over the weekend, services and manufacturing PMIs in both Germany and France for September were very weak, Middle East geopolitical concerns continue to concern and those trade talks between the US and China are still up in the air.

Thomas Cook’s demise, although anticipated by market participants over the past few months (see our report from May), would still clearly have added to the weaker tone.

It’s probably safe to assume that the continued decline global trade will make sure that Germany enters a ‘technical’ recession at the end of Q3, and the Eurozone as a whole won’t be far behind. The numbers suggest that we are back in economic crisis territory, given that the data is now showing the weakest levels of activity (in German manufacturing anyway) since 2008. And it is happening without the associated collapse in financial markets.

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