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Market Comment | Spanish assets recovered slightly in steady markets

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  • Financial markets showed a slight increase in volatility on a day characterised by low trading volumes, as the US bond market was closed for Columbus Day. A slight rekindling of tensions with North Korea over the weekend (see) had little impact on volatility, which remained subdued in the US.
  • Spanish equities partially recovered from last week’s drop, as political tensions in Catalonia seemed to ease somewhat (see). Banks with major exposure registered the higher rebound effect, while the Ibex index outperformed its peers. The DAX Index also showed gains as German industrial production beat expectations. In bonds, Spanish risk premium remained inched down, in line with other peripheral countries.
  • The USD held firm at recent high levels, reflecting expectations of tax cuts and higher interest rates in the US, while US stock prices also showed little advance (see), at their historical high levels.
  • The TRY fell sharply on tensions between the US and Turkey as both sides suspended visa services (see). Moreover, Turkey’s main stock index also fell significantly (see). EM currencies fell across the board, but to a lesser extent than the TRY, on the back of declining oil prices (see) and a rising USD.
  • Chinese assets outperformed after a week-long break, following the release of FX reserves that showed a higher-than-expected figure today, and despite the disappointing Caixin Services PMI (September). The CNY appreciated, while the Shenzhen and Shanghai Index outperformed.

 

 

Update 18 CET 09 October, 2017

Table 1

Source: Bloomberg, Datastream and Haver

* With one day delay

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