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Market View

Market Recap – Elections in Australia and India

Friday, May 17, 2019 10:27 AM GMT

Concentrating on market’s behavior during the last two weeks, since the 5th of May Trump’s tweet that increased trade tensions, one should consider:

  • the steeper reversion of the US Government Bond yields. Short term maturities have decreased by 2~3bps, whereas the longer maturities have decreased by 13~15bps

 

  • the fact that US equities have not tumbled. Both the Dow Jones 30 and the S&P500 have dropped by 5.5% from recent highs and found support. The Dow Jones recorded a close below the 200 day moving average on Monday, but is currently above that technically significant level for 4 days in a row
  • CNY has depreciated versus the USD. It is currently recording a -3% drop since the close of the 3rd of May and could potentially reach the 6.96 USDCNY level, a -3.41% drop.
  • Dax30 is currently recording -1.56% since the 3rd of May, FTSE100 at -0.76%, the Australian index 200 at -0.34%. Only the Nikkei225 has not managed to recover (currently at -5.33% since the 3rd of May) but one should consider the significant strengthening of the JPY that takes place whenever the risk-off mode prevails.

 

On this weekend the 7th and final round of Indian elections will take place, as well as the Australian general elections.

Macro releases: Today’s calendar includes the European inflation, and the preliminary release of the US consumer sentiment and inflation expectations.

 

Disclaimer

The views expressed do not constitute investment or any other advice /recommendation /suggestion and are subject to change. Reliance upon information in this material is at the sole discretion of the reader.Opinions expressed in the report do not represent the opinion of Zulutrade and do not constitute an offer or invitation to anyone to invest or trade.

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