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Market Update - 27/09/16

Tuesday, September 27, 2016

Disclaimer: This is an informal commentary by one of our Market Analysts. It should not be taken as investment advice and is made available only on that basis.
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US: The S&P closed -0.86%, -0.18% from the London close, on volumes -7% vs. the 30 day average. U.S. equities sold off yesterday, perhaps de-risking into the debate as well as reacting to concerns about bank capital raising. Active SPX futures opened ~40bps lower overnight, and they immediately sold off another 40bps within the first 15 minutes of the open, albeit reverting to opening levels by 10:30am. The rest of the session featured contained moves lower, with SPX ultimately paring most of its post-Fed rally by the close. Of 11 SPX sectors, only real estate closed higher, up 16bps in-line with the bid on bonds (10y yield compressed 3.5bps to 1.585%). Financials were the laggard, down 1.54% on the day, followed by Health Care and Discretionary. The dollar index shed 17bps to close at 95.32.

Asian markets are mixed this morning. Futures have strengthened from earlier lows following the first presidential debate in which Clinton was viewed as the better performer. The Nikkei is off its opening lows with the dollar-yen rebounding. Greater Chinese markets are being led higher by the Hang Seng after data revealed a rise in industrial profits last month.

No great surprises in the first debate, with a CNN/ORC poll showing 62% of viewers believed Clinton won. Interestingly the Mexican Peso gained 2% versus the US$ after the debate.

Commerzbank speculation  to announce 9000 job cuts & a dividend freeze

MSCI upweight Caixa Bank on close today . Follows Friday placement, theoretical tracker demand is 28m shares / 0.7 days vol.

Irish August Mortgage approvals +55% yoy (+€676m); YTD, approvals are 17% ahead, following a slow start to 2016; Re-Mortgaging +78%, purchaser component +51%

All European markets are open today. In other regions, Taiwan is closed.

FTSE has confirmed it will delete Wireless Group (WLG LN) before the open on 29th September as the 315p cash offer from News Corp UK & Ireland (ultimately controlled by News Corp) has been declared wholly unconditional. Acceptances have reached 94.95%

Oil for WTI November delivery is currently trading at $45.87 -0.13% after moving back +3.26% yesterday.

Deutsche Bank opens unchanged after yesterday’s very weak session , company says does not need a rights issue. 

Richard Perry, one of the biggest names in hedge funds, is calling it quits after 28 years. Perry, 61, is winding down his New York-based flagship fund as the industry confronts one of the most tumultuous periods in its history. In a letter to investors Monday, he said his style of investing no longer worked.

BlackRock  the world’s biggest money manager, said investors should be wary of Treasuries as the Federal Reserve moves toward raising interest rates.

Markets better at open, Europe trades +40 BPs.