Market Headlines 17/7/2017

US

  • The S&P 500 closed at a fresh record high Friday, advancing 0.5%, despite a 0.5% decline for Financials and soft consumer inflation and retail sales data. Real Estate and Technology stocks were the biggest outperformers for the session, gaining 1.1% and 0.9% respectively.
  • Financials underperformed the broader market as investors were left underwhelmed by a batch of US bank earnings. The sector will remain subject to close scrutiny as Goldman Sachs, Morgan Stanley and Bank of America report results this week.
  • US treasury yields fell following the disappointing inflation data release, touching 2.27% at one point before settling at 2.33% (-1bps on the session).  The US dollar also weakened following the broadly disappointing economic data, trading 0.7% lower against the Euro.

 

Europe

  • European equities underperformed their US peers on Friday, with the Euro Stoxx 50 index finishing marginally lower.
  • Investors await the latest monetary policy decision from the European Central Bank on Thursday this week, three weeks after Mario Draghi spooked bond investors by arguing that “deflationary forces” had been vanquished. Economists widely expect the ECB will leave interest rates unchanged.

 

Asia

  • Chinese Q2 GDP growth figures were released this morning. Q2 GDP printed at 6.9% yoy, unchanged vs Q1 but ahead of market expectations for 6.8% yoy.

Chinese equities initially sold off at the open of trade, likely reflecting the stories of potentially more stringent financial regulation following the PBOC conference over the weekend. However, indices recovered from the lows following the GDP data release, ultimately settling 1.7% lower.

 

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