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Daily Archives: 24th June 2018

24th June 2018

Batteries need recharging

MARKET CLOSE:
iTraxx Main

70.7bp, -0.3bp

iTraxx X-Over

305.5bp, -1.5bp

🇩🇪 10 Yr Bund

0.34%, +0.2bp

iBoxx Corp IG

B+128.3bp, +0.5bp

iBoxx Corp HY

B+391.5bp, +2bp

🇺🇸 10 Yr US T-Bond

2.89%, -1bp

🇬🇧 FTSE 100

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🇩🇪 DAX

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🇺🇸 S&P 500

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Markets lacking inspiration…

We might have closed out on the front foot, but that was another damp squib of a week to have traded through, with little really to give inspiration. It seems like that there have been too many of these weeks this year. It leaves us heading into the 6-8 week summer lull/break failing to get total returns for most risk assets classes into the black, year-to-date. It’s not been a great opening half of the year. We have had to contend with a high level of potential event risk over the past 2-3 years, and now we have moved a leg higher with the Trump agenda on import tariffs very likely set to plunge the global economy into a trade war.

The EU finds itself dragged into difficult situations such that it fights on several fronts taking in Brexit, US trade tariffs, the Italian political situation and dissent emerging from the Eastern European/Austrian block. It promises to be as difficult and uncertain a second half of the year as has been the first. The headline risks at a minimum will most likely stifle any material rallies. We’re already seeing some of the impact on the region, with data out at the end of last week highlighting the continued slowing of the manufacturing sector (in Germany and France).

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