Geral Fitzgerald’s Market Review February 11th

LAST WEEK IN 30 SECONDS...

Global equities continued their recovery last week finishing the week +0.66%. This, however, was after markets turned cautious following Donald Trump ruling out a meeting with the Chinese President Xi Jinping before the 1st March stoking fears of additional trade tariffs.

Eurozone government bond yields went lower over the week with the German 10-yr bund down -0.08%. This followed the European Commission lowering the growth forecast for the Eurozone, coupled with disappointing industrial output figures emanating from Italy. The 10-year Italian bond rose +0.25% over the week as a result.

THIS WEEK IN 30 SECONDS...

US representatives are in Beijing this week seeking to make a breakthrough on trade talks before the 1st March deadline. In Washington Donald Trump will seek to avoid another partial shutdown on Friday by reaching a budgetary agreement with Democrats. Such agreement, however, seems unlikely.

This week sees a glut of Q4 2018 earnings announcements from over 4,500 companies, including consumer staples giants Nestle and Coca Cola. Elsewhere, Eurozone industrial production and US inflation data are due for release on Wednesday, with US industrial production data released on Friday.

GERMAN BUNDS TURNING JAPANESE

Since the European Central Bank (ECB) stepped in to stimulate growth within the Eurozone, yields on German Government bunds have trended lower. Despite indications that the ECB would be willing to raise interest rates this year, further economic and political uncertainty has seen the German bund yield move sideways. A yield of 3.50% on a German Bund is for now something consigned to the past.