Yields of Spanish, Italian, and Portuguese debt have become more agreeable in the past weeks as confirmed by yesterday’s Spanish 3 and 10-year auction which saw the €4.5 billion targeted exceeded dramatically. However, this wasn’t received as a positive event by markets who are convinced that Spain will need a bailout and this helps to prolong the process. Greece meanwhile is struggling to find more places to cut the budget as another deadline looms to seek further aid. Major stock indices closed lower led by the -1.68% cascade in the Italian MIB. The Spanish IBEX and French CAC 40 were also weaker, falling -0.95% and -0.62% respectively. EURUSD ticked up slightly in the overnight session, trading at 1.2980.

Asian index gains are outpacing peers as optimism overcomes fears of a further Chinese slowdown. Some analysts are expecting that this present contraction will last longer than the 2009 crisis experience. Continued contracting PMI data coupled with bad loans that have shot up several hundred percent on a weak global backdrop have contributed to China’s woes. A prominent government researcher is expecting that growth might even dip below the ever-important 7% level. Asian indices are trading higher across the board as Hang Seng outperforms peers, rising 0.78%. The Nikkei has added 0.61% while the Australian ASX trails, gaining 0.34%. AUDUSD has rebounded from yesterday’s losses, climbing 0.26% while USDJPY remains unchanged at 78.250.

Economic news has continued to filter in mixed as the most recent set of employment data and manufacturing PMI figures disappointed traders. Jobless claims have missed expectations several weeks running and the Philadelphia Fed Manufacturing Index, although beating analyst forecasts, remains in negative territory. Continuing jobless claims, while beating expectations, are still negatively implicated as more laborers leave the job market. Leading indicators point to a possible recession as the global economy falters. The Nasdaq underperformed peers, declining -0.21% as the S&P 500 dipped -0.05% and the Dow Jones outperformed, increasing 0.14%. Oil has rebounded slightly after a multi-day rout, with prices ticking up 0.65% to $93.20 per barrel. Copper has popped up 0.80% on confidence during the overnight session.

 

Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.Read the Terms of Service

 

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