ALL QUIET TODAY Markets generally settled

Apart from Trump’s continuous missive with CNN – this time a tweet with the animation having a train hit the particular CNN reporter for calling out Trump on fake news, markets were generally settled. Apart from Trump’s CEO’s Council, markets were generally orderly. Overnight, several key members left because of Trump’s response to the incident in Charlottesville, Virginia, raising Trump’s ire. To date Merck’s Frazier, Intel’s Krzanich and Under Armor’s Plank have departed. Plank in particular, earlier on, was very much a Trump enthusiast.

The equity market had a small run up on strong U.S. retail sales which surged 0.6% the largest gain since December 2016. Consumer spending which accounts for more than 2/3 of the U.S. economic activity increased at 2.8% annualised rate in the second quarter after a tepid 1.9%.

The improving economic conditions, positive outlook has made the environment appealing for the risk off trade again and that’s what we saw last night. Wednesday around 2pm will see the Fed release its Minutes. With lil’ Kim no longer rattling his sabre, equity markets breathed and bonds exhaled and that was the day.


The Dow was marginally up, whilst the S&P closed down about 0.1%.The Dax was up 0.1% and the Stoxx 600 gained 0.1%.

Bonds retreated with the 10-year closing about 4 bp to close 2.26%. The 2-year note closed 1.35%, and the 30-year closed 2.847%. The curve closed marginally higher with the 2/30 closed 149.7bp , the 2/10 closed 92.2bp and the 10/30 closed 57.4bp. European bonds moved similarly with the gilt closing at 1.08%, the bund at 0.425%, and the OAT closed at 0.72%.

Commodities were mixed. Gold fell 0.7%. WTI rose 0.1% to close at $47.61 a barrel. Asia is seen as the main market for Venezuelan oil should U.S. sanctions kick in. It also appears as though China is reducing its appetite for crude as there was a sharp slowdown in refinery processing. Processing has fallen to September 16 levels.

Aussie Market Today

Easing geopolitical tensions mean that risk on trades are favoured. Bonds will continue to be sold and that’s probably how the day will pan out.