Markets higher as phase one trade deal signed

Markets higher as phase one trade deal signed

  • Investments
US stocks led global equities higher as the first phase of the US-China trade deal was formally signed, writes Ian Slattery.

The terms were broadly in line with expectations and included commitments from China to purchase US goods and services worth over $200bn over the next two years. The Senate also passed the United States-Mexico-Canada Agreement (USMCA) trade deal, and positive economic data also helped lift sentiment.

New home construction in the US surged 16.9% in December (the highest level since 2006) whilst U.S. financials kicked off the Q4 earnings seasons. Morgan Stanley grabbed the headlines with impressive profit and revenue numbers, whilst Goldman Sachs saw a more mixed reaction to their release.

More big names such as Netflix, Johnson & Johnson, and Intel are all set to report this week, as earnings is set to take much of the focus in the coming weeks. 

 

1 Week Return

13.01.20 to 20.01.20

Year to Date Return

31.12.19 to 20.01.20

 

Local Currency

Euro

Local Currency

Euro

World

1.1%

1.5%

2.4%

3.6%

US

1.2%

1.7%

3.2%

4.3%

Europe

1.5%

1.5%

2.4%

2.4%

Ireland

-0.7%

-0.7%

-1.2%

-1.2%

UK

0.8%

1.2%

1.8%

0.9%

Japan

0.2%

0.5%

1.2%

0.9%

Hong Kong

1.5%

2.0%

5.2%

6.7%

Corporate Bonds

0.4%

0.4%

0.2%

0.2%

Sovereign Bonds

-0.1%

-0.1%

0.4%

0.4%


Equities

Influential US stocks led equity markets higher last week. Hong Kong was the strongest market delivering returns of 1.5% in local terms and 2.0% in euro terms.

Fixed Income & FX

The US 10-year yield finished at 1.82% last week. The German equivalent finished at -0.21%. The Irish 10 year bond yield finished at 0.06%. The Euro/US Dollar exchange rate remained at 1.11, whilst Euro/GBP was at 0.85.

Commodities

Oil fell back slightly finishing the week at $58 per barrel. Gold finished the week at $1,560 per troy ounce. Copper increased to $6,247 per tonne.

 

The week ahead

Tuesday 21st January:

  • No change in interest rates are expected as the Bank of Japan meets.

Thursday 23rd January:

  • The ECB meets for its first interest rate decision of the year.

Friday 24th January:

  • Eurozone manufacturing and services PMI for January go to print.

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