Daily Market Brief [23/07/2018] - By Alphaex Capital

Alphaex Capital Daily Market Brief

23/07/2018

European Equity Markets

Equities in Europe closed lower on average on Friday afternoon after comments from President Donald Trump over imposing tariffs on $505 billion worth of good. Reports that the European Commission is also readying retaliatory tariffs in case the U.S. moves ahead with duties on European car-makers.

US Equity Markets

Equities closed slightly lower on Friday as escalating trade jitters spurred on by U.S. President Donald Trump’s latest tariff threats against China offset a string of robust earnings led by Microsoft. Microsoft hit a record high and ended the session up 1.8% after strong second-quarter earnings. The S&P 500 lost 0.09%, to 2,801.83 and the Nasdaq Composite fell 0.07%, to 7,820.20.

Asian Equity Markets

The Nikkei 225 traded lower by 1.09%as the dollar extended its losses against the Japanese Yen. Major exporters traded lower, with the electric appliances sector falling 0.86% and automakers declining. Financials, however, recorded sharp gains, with Mitsubishi UFJ Financial Group up 4.17%. Chinese equities also tracked lower in early trade, with the Shanghai composite edging lower by 0.63% while the smaller Shenzhen composite lost 0.91%.

Forex Markets

U.S. President Donald Trump made comments on the greenback’s strength and global finance leaders ended a weekend meeting with little consensus on how to resolve multiple disputes over U.S. tariff actions, this caused the dollar to weaken across its peers. The USD/JPY is now trading around 111.06 yen. The EUR/USD is also trading lower by 0.2% to $1.1742.

Commodities Markets

The price of oil fell on Monday due to increasing concerns about oil demand after finance ministers and central bank governors from the G-20 warned that global economic growth risks have increased amid rising trade and geopolitical tensions. Brent crude fell 18 cents to $72.89 a barrel. U.S. West Texas Intermediate (WTI) futures declined 13 cents to $68.13 a barrel. Drillers cut 5 oil rigs in the week to July 20, bringing the total count down to 858, Baker Hughes energy services firm said in its closely followed report on Friday.

Bond Markets

The U.S. yield curve reached its steepest level in more than three weeks on Friday afternoon as President Donald Trump criticized the speed of the Federal Reserve’s pace of interest rate hikes. The 30-year Treasury bond yield was up 6.6 basis points from Thursday’s close to a session high of 3.03 percent. The yield on the benchmark 10-year note was as high as 2.90 percent, up 5 basis points from its last close. At the short end of the curve, the 2-year note yield increased by 1.2 basis points from Thursday’s close at 2.60 percent.

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