In Europe, most dealers were awaiting the result of the BREXIT talks as it was understood to break ahead of lunchtime. Then, the talk was for a press conference mid afternoon, then delayed until dinner. Late this evening we are still waiting news but we have seen GBP make small headway throughout the day to close 1.4360 (+0.2%). UK Retail Sales also claiming some of that coo dose (estimated 3.6% actual 5.2%). All core European indices had the same trading pattern this Friday – opening at the days highs only to close at the days lows. Between them they all returned losses of around -0.6%, IBEX closed weaker at -1.2%. Oil was again the excuse dealers used as we saw the price decline around 3.5% today.
The US markets were under a little pressure at the open but spent the reminder of the day attempting to recover, which in all fairness they did reasonably well. The DOW and S+P closed small lower whilst the NASDAQ closed up +0.4%. It does not sound all that but when considering that oil was selling-off most of the US afternoon trading, it is quite a result. The Dow closed positive for now on the close of our weekly models leaving support at 16170 for next week with resistance starting at the 16525 level.
Gold traded in a narrow range (having seen over $40 spread on Thursday) and managed to close a little under the days high. At $1230 dealers are questioning if we see a continuation of this weeks rally for next week. On our model, gold closed weak and support now becomes critical at the 1170 level down to 1160. The key overhead number will be 1220 as the pivot point for the week. Opening beneath this level will signal this become resistance.
In the bond markets we equally saw a quiet end to the week. With US 10’s closing at 1.75% this is only little changed from Thursdays close. The German bunds saw even more support as dealers are fearful of weekend press and so we see the 10yr Bund close 0.21%. Italy 10yr closes 1.56% (+1bp), Greece closes 10.25 (+8bp), Turkey 10’s 10.64% (+6bp) and Gilts 1.41% (-3bp).