Market Commentary-January 17

American banks shares have established the trend for yesterdays market final run, having published robust, broader and much better than anticipated numbers. Although Brexit has controlled headlines news around the world, it looks as American markets are careful yet undeterred as they continue in this decisive run. 

The capital movement is becoming obvious every day with growing American markets, coupled with rising trading volumes. By the closing hour, every index was a touch off of their day's highs with the S&P500 plus 0.22%, Nasdaq with plus 0.15%, and DJI posting 0.6% as the Huawei Technologies news broke. 

The U.S. Dollar index extends its steadfast bull run, however, should probably not be a wonder given the financial darkness surrounding the world; also, the daily trading momentum is turning over of overstretched levels. Yesterday was a session when the S&P500 closed up and reached our Index Rally 2622, but also did the VIX index.

It seemed the rally seen in American markets was insufficient to influence Asia-Pacific with major markets finishing mixed. Japan’s Nikkei index posted some of Tuesday's gains slipping minus 0.55% with the Yen currency also trading a somewhat big yesterday evening, with slightly over a 109 handle. 

It was weaker than a decisive day for Nikkei225 index opening roughly where it closed. Volumes are however light, and that is damaging securities companies as well as banks with Nomura Holdings losing almost 3% on the session. 

China’s stock markets continue their focus on multiple tax cut measures implemented to prop growth; however, the markets are still to determine the quality. Core Shanghai and the H.K. Hang Seng indices closed virtually unchanged, having consumed the day in and out of definite boundary.

In Eurozone bank shares had been some of the soundest performing shares on Wednesday as speculation developed that mergers and acquisitions (M&A) could be expected that Deutsche bank may seek a partner outside of the country. Both DAX30 and CAC40 were up around plus 0.4% respectively.

British Pound recovered all of the 1.5% it lost Tuesday. By the close of U.S. market hours, we were back in a very tight nearly unchanged price range. The market unison on all trading desks is for a ‘quiet Brexit’ or even calls for a removal of EU's Article 50.

There seem to be as numerous options as ideas are being talked, and all as the important March 29th date nears. Gilt-edged securities were a little lower yesterday as worries of higher more significant debt issuance spread out. 


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