The Friday Market Minute
- Global equities stabilize as China flashes back on investment restrictions, signals liquidity support
- However, China shares are on the rise in the worst month in 2.5 years as the yuan falls 3.4% against the dollar in June.
- The euro has made significant gains against the US dollar after EU leaders reached a framework agreement on migration crises, which has eased domestic pressure on German Angela Merkel
- as the bank's shares move into the second phase The US Federal Reserve's stress tests are expected to gain momentum.
Global equities rallied on Friday as a turnaround in China and a weakening of the US dollar eased pressure in Asia, even as investors continue to worry about the impact of the trade war on overall economic growth.
China's shares rebounded from the multi-year lows on Friday, which was partly sparked by news that the National Development and Reform Commission will put some restrictions on foreign investment in domestic industries such as aviation, crop production and banking, as well as comments from the People's Bank of China (PBOC ) that it intends to maintain "sufficient" liquidity in the financial system of the world's second largest world. However, a deeper concern remains the fate of the yuan, which has seen its steepest monthly downward trend against the US dollar in two and a half years. The PBOC set a higher middle rate for the currency at 6.1
Widening sentiment was also supported by a weaker US dollar, which fell 0.58% to 94,835 against a basket of six global currencies as the euro entered a framework agreement between European leaders to tackle the migration crisis increase in the region The political pressure on Chancellor Angela Merkel will be alleviated in the short term.
However, the Shanghai Composite rose nearly 2% and the CSI 300, up 2.25%, triggered the global recovery and led regional equities. The MSCI Asia ex-Japan index closed the session at 1.3 % to and the Japanese Nikkei 225 gained 0.15% and ended the week at 22,304.55
US stock futures also appear to be reacting to contracts related to the Dow Jones Industrial Average
European equities rallied on the last trading day Stoxx Europe 600 also rose 0.56% to 378.98 points at the start of trading and markets in Germany (+ 1.2%) in the second quarter and the first half of the year and France (+ 1.32%) rose significantly. Britain's leading FTSE 100 countries, with a 1.86% increase as base capital, progressed.
The UK stock market returned 8.2% in £ in Q2 – the best major index. Less impressive, once you adjust to $, but still ahead of the global benchmark. The likely trigger? The valuation gap between British and global equities (13.4 versus 15.0: 2019PE) attracted value investors. pic.twitter.com/7XU3XuMIhn
– Simon French (@shjfrench) June 29, 2018
In the bond markets, however, the US government bond continues to be a more cautious image for investors starting curve-in, which still holds the narrowest difference between 2-year and 10-year yields since 2007.
Benchmark 10-year notes were traded at 2.86% in early London trade, while 2-year notes were trading at 2.528%. A survey by Reuters, which suggests that most expect fixed-income experts that the curve reverses over the next one to two years – that is, short-term returns will rise higher than longer-term ones. An inverted yield curve is one of the key signals of the market for the recession in the world's largest economy.
However, global oil prices do not seem to reflect fears of slowing as crude oil continues to reach 2014 highs. Recent days have seen sanctions on Iran and supply bottlenecks from Canada due to a slowdown in the production of some OPEC members.
Brent Crude Oil Futures contracts for the September delivery, the global benchmark, had barely changed from their Thursday closing session in New York to $ 77.59 a barrel, while WTI contracts for August were closer to the United States gas prices were lowered by 19 cents to $ 73.28 a barrel.