Market Talk – February 3, 2017

One of the main topics of conversation overnight was the fact that the Shanghai market reopened, after the week long holiday, to a surprise reverse-repo hike (10bp’s to 2.35%) which resulted in a -0.6% decline in the Shanghai Index. The CNH traded back up through the 6.82 mark but in late US trade saw core Asian futures making solid 1% gains also. The Nikkei cash closed almost unchanged ahead of the US NFP’s report but talk surrounded the BOJ’s discussion about JGB’s yields edging higher.
A positive morning for European equity markets ahead of the US data with core up between 0.4% and 0.8%. Spanish bank Banco Popular however was down 7.5% having reported a 3.5bn loss in 2016 (shares are down 54% for the past 12 months). A strong day overall with most core markets closing 0.5% stronger.

This post was published at Armstrong Economics on Feb 3, 2017.