GERMANY IS IN A “STRONG” POSITION to weather
Brexit
and trade shocks, stated by Finance Minister Olaf Scholz. The country has
solid
public finances and a
“vibrant”
domestic economy to
cope with headwinds. German cabinet authorizes a budget for 2020 that calls for
1.7 percent spending hikewithout issuing new debt. The
Spanish economy
expanded in early 2019, “
stronger-than-expected domestic
demand
offset a slowdown in exports”. Spanish GDP grew 0.6 percent in January, to maintain this
growth, the Bank of Spain noted reducing public deficit and debt to protect the
economy against future shocks. Assets worth around a trillion pounds is moving from
London to hubs in the
European Union ahead of Brexit. The UK 10-year Gilt
declined three
basis points.
FTSE 100, -0.16%,
STOXX Europe 600 -0.
68%,
CAC 40 -0.47%,
German DAX -1.34%.
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RISK-ON SENTIMENT REGAINED CONTROL as investors pour capital into equities. The pound rallied to $1.3282, “The predominant notion adopted by the market is that as long as the
worst case scenario of hard
Brexit is avoided by delaying
Brexit, the pound is a buy on dips,” stated by
Rabobank strategists. Advisers to the German government on
Tuesday cut its growth forecast for this year to 0.8 percent.
Christopher Schmidt, one of the
advisers
mentioned: “
German economic boom
is over but a recession is not currently expected due to the
robust domestic
economy.” The ZEW indicator of economic sentiment points to relatively weak growth for the first half of 2019
fueled by industrial orders posting their largest drop in seven months.
The UK 10-year Gilt elevated two basis points.
FTSE 100, +0.48%,
STOXX Europe 600 +0.
60%,
CAC 40 +0.27%,
German DAX +1.10%.
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CME STATED, EURO TRADING HAS MOVED TO AMSTERDAM ahead of
Brexit; full migration will be
completed
by April 1
st. CBOE Europe is “closely
monitoring political discussions
and would react as quickly as possible” that would
alter the April 1
st
launch date. UK will produce a new indicator called a VAT index,
which will display whether businesses are seeing more or less turnover in employment; providing better
clarity on economic growth and contraction. Bank of England will be utilizing this indicator to
gauge inflation and determine
interest rates. The UK 10-year Gilt declined two basis points.
FTSE 100, +0.77%,
STOXX Europe 600 +0.
20%,
CAC 40 +0.13%,
German DAX -0.12%.
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BRITAIN’S ECONOMY CAME CLOSE TO STAGNATING in February amid Brexit nerves and “sluggish” global growth. Earlier this month, the ECB
offered banks a new round of cheap loans to help revive the Eurozone economy. Norway’s central bank is
expected to raise its key rate
on March 21 and will continue to tighten later this year due to
rising inflation and solid growth.
Norway’s
2018 Q4 growth
exceeded expectations and
higher demand in crude oil prices point to
a justification
for tighter policy. The UK 10-year Gilt declined one basis point.
FTSE 100, +0.50%,
STOXX Europe 600 +0.
63%,
CAC 40 +0.63%,
German DAX +0.18%.
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EUROPEAN SHARES RALLIED HIGHER after
UK parliament
voted a deal must occur
between the UK and the European Union; creating a "stable" environment for the near term.
David Lafferty, Chief Market Strategist at Natixis stated, “Strong macro data, lifted by better earnings trends, and confirmed by stable-to-rising yields will increase equity prices.” There is “gradual”
optimism being priced into the markets and barring something highly unlikely, the “
possibility
of an actual
no-deal zero
but less than
5 percent,” mentioned
Tim Graf,
Head of Macro Strategy
at State Street Global Advisors.
The Pound slipped
0.7 percent
after
advancing by more than 1 percent on Wednesday. The UK 10-year Gilt rose 2 basis points.
FTSE 100, +0.50%,
STOXX Europe 600 +0.
63%,
CAC 40 +0.63%,
German DAX +0.18%.
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EUROPEAN SHARES ADVANCED HIGHER
as investors hope the UK rejects no-deal Brexit. This
induced the
British pound
to
rally
by half a percentage point
. UBS Analyst stated, “UBS’s Wealth Management Group remain cautious with client’s assets and are avoiding short-term rallies in the pound, and reducing exposure to UK equities.” Investment Bank, JP Morgan
reduced the probability of the UK leaving the European Union to
35 percent from 45 percent. Despite the
optimistic environment, Japan’s machinery orders
fell in January at the
fastest pace in four months causing downward pressure on the Nikkei. The
Australian
dollar skidded lower after a consumer confidence gauge triggered
concerns about a slowing economy. The UK 10-year Gilt rose 2 basis points.
FTSE 100, +0.11%,
STOXX Europe 600 +0.51%,
CAC 40
+0.65%,
German DAX
+0.65%.
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IRISH SHARES OUTPERFORMED THE REST OF THE EUROZONE after
Britain and the European Union
agreed to alterations on Britain’s withdrawal agreement, which eased some
fears of no-deal Brexiton March 29.
Dublin’s ISEQ climbed 1.4 percent, set for its biggest gain since Feb. 5.
Head of European Equities at German asset Manager DWS stated, “Positive momentum in the markets will continue once we know what the final outcome of Brexit is going to be.”
The British pound is at a critical level of 1.31 against the U.S. dollar. “Anything above this level is seen as Brexit certainty by investors
, whilst anything below is seen
as Brexit uncertainty, mentioned Hamish Muress, a Currency Analyst at OFX. FTSE 100 +0.20%,
STOXX
Europe
600 -
0.01%,
CAC 40 +0.14%,
German DAX -0.16%.
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EUROPEAN MARKETS TICKED UP ON MONDAY as investors await a
critical Brexit vote
on Tuesday regarding Prime Minister Theresa May’s deal. European officials revealed there was no progress this past weekend,
“May has boxed herself even deeper into a corner, it seems the second meaningful
vote will go ahead on Tuesday but it also seems like it won’t be the last meaningful vote on this”. May, once again,
faces a landslide defeat in Parliament
if she does not delay the vote. Financial firms are estimated to shift an
immense $1.2 trillion in assets from the UK to the European Union. The
UK 10-year Gilt
dipped 1.4 basis points.
FTSE 100 +0.28%,
STOXX Europe 600 +
0.45%,
CAC 40 -0.48%,
German DAX +0.42%
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POUND CONTINUING POSITIVE RISE IN VALUE AS MOMENTUM is implying a no-deal Brexit will be
averted. The pound is up 7 percent against the
dollar year to date, making it the world’s best performing major currency. “Nomura’s positioning metrics indicate that net short pound
positions have declined to near their lowest levels this year, with a
net short of less than $3 billion.” With spreads on the pound narrowing and liquidity
elevating, we could see the pound go
higher in the upcoming weeks. The
UK 10 year Government Bond
yield
rose one basis point.
FTSE 100 -0.73%,
STOXX Europe 600 -0.94%,
CAC 40 -0.74%,
German DAX -0.67%.
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EUROPEAN CENTRAL BANK CHOPS EUROZONE GDP GROWTH FORECAST
for 2019 after several
weak economic data reports. The GDP estimate has been
revised down to 1.1 percent from 1.7
percent, in addition, the ECB plans to
postpone any rate hikes
until the end of the year.
UK treasury yields plunge upon the announcement, The
UK 10-year Gilt
sank 6 basis points and the
30-year gilt dipped 5.1 basis points.
FTSE 100 -0.68%,
STOXX Europe 600 -
0.56%,
CAC 40 -0.48%,
German DAX -0.73%
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