Global Equities Lower As US Bond Yields Hit 3%
Fiona Cincotta April 25, 2018 4:45 PM
Not even news of a $64 million takeover of Shire and a potential takeover war for Sky was enough to lift the FTSE, which fell throughout Wednesday’s session. Rising US bond yields, crossing the 3% barrier for a second time in as many days, were once again to blame for dampening demand for equities, despite stellar US earnings.
Not even news of a $64 million takeover of Shire and a potential takeover war for Sky was enough to lift the FTSE, which fell throughout Wednesday’s session.
Rising US bond yields, crossing the 3% barrier for a second time in as many days, were once again to blame for dampening demand for equities, despite stellar US earnings.
Twitter whipsaws on results
Twitter is seen reaping the rewards of its more recent push into live video and more personalised content, luring more users and advertisers, which bolstered revenue and profits.
Sales jumped 21%, the biggest increase in two years to $664.9 million, whilst active monthly users rose to 336 million an increase of 6 million from the previous period and ahead of analysts forecasts.
Yet despite the solid figures Twitter gave a more cautious outlook causing a whipsawing in the share price, from an initial 14% rally in early trade, to a 5% decline at the time of writing.
Commodity stocks & Shire Largs FTSE
Commodity stocks dominated the FTSE loser board with Anglo American extending losses from the previous session by an additional 5%.
Oil majors were also under pressure tracing the price of oil lower. Shire also added to the negativity, trading down 2.5% after accepting a $64 million takeover by Japanese peer Takeda at the fifth time of asking.EUR/USD to $1.21 on dovish Draghi?
As US bond yields continued to press higher EUR/USD came under increasing pressure, tumbling through $1.22 ahead of the ECB policy decision tomorrow.
With weaker economic data, softer inflation and increased global tensions over a potential trade war since the last meeting, we would expect the ECB’s Draghi to sound more dovish at the pursuing press conference.
No changes are expected to policy and the ECB are unlikely to give any clues as to the ending of the current bond buying programme, until at least June if not July.
Policy makers will want to have more time to judge the slowdown in the eurozone economy. A more dovish sounding Draghi could see the EUR/USD fall to $1.21.
GBP/USD slips further ahead of Friday’s GDP reading
GBP/USD was another victim of the stronger dollar, falling further away from the psychological level of $1.40 ahead of Friday’s all important growth figures.
After the hat-trick of disappointing numbers last week and a more dovish sounding BoE, a weaker than forecast Q1 GDP on Friday would put to bed any remaining optimism of a May rate hike.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.