UNITED STATES

In the US, industrial production showed a 0.1% decline in March results against February; this served to heighten ongoing concerns over the outlook of the global economy.

Donald Trump has disallowed a congress bill demanding an end to the US involvement in Yemen’s civil war. The president claimed the bill was “an unnecessary, dangerous attempt to weaken his constitutional authorities”.

On the Fed’s policy stance, Cleveland’s Loretta Mester and Philadelphia’s Patrick Harker supporting the “hold” stance. On the back of this, Trump intends to nominate 2012 Republican presidential candidate Herman Cain to the Fed, following his nomination of Stephen Moore which many see as a move to strengthen his influence on the Federal Reserve. The S&P 500 rose by 0.05%; while Nasdaq Composite also added 0.3%. The yield on 10-YR UST’s was a no-mover and remained at 2.596%.

UNITED KINGDOM

The UK’s labor market continued to show strength amidst the Brexit uncertainty weighing on financial markets. Since the turn of the year 179,000 new jobs have been created and headline unemployment remains at 3.9%. Moderate Conservative MP’s are looking to endorse a PM candidate to prevent the party being lopsided with Eurosceptics, following Theresa May’s exit. The FTSE 100 gained 0.4% while the yield on UKT advanced from 1.2124% to reach 1.2174% the GBP however showed a slight decline from 1.3100 to 1.3048.

EUROPEAN UNION

In the Euro area inflation appears to be on the uptick on the back of wage growth according to Bloomberg. However, analysts are mindful that a slowdown in Germany could have a ripple-effect across the region.

The Stoxx 600 added 0.4%, while the Xetra Dax 30 rose by 0.7% with a high demand for industrial and financial stocks coupled with an increase in US earnings as the platform for this growth. The Euro however, shed marginally from 1.1304 to 1.1281 against the greenback

ASIA

Great news out of China today as the GDP growth for Q1 2019 surpasses all expectations to reach 6.4% evidencing that the efforts of the government to stabilize the economy is taking effect. Donald Trump’s change of heart on a trade war also appear to support the resurgence of the economy. Japan and the US have agreed to speed up their trade talks following a meeting in Washington. Toshimitsu Motegi would meet with Robert Lighthizer next week on discussions surrounding agriculture. Donald Trump’s decision to windthrow from the regional Trans-Pacific Partnership trade deal has left local farmers in the US at a disadvantage to farmers in the other TPP member countries.

There was a mixed showing for Asian stocks on the back of better-than-expected economic results. Shezhen composite added 0.428% while the Hang Seng Index dipped by 0.22%. In Japan, the Nikkei grew by 0.33% while the TOPIX index also added 0.29%. ASX 200 in Australia fell by 0.26% as almost all the sectors dipped.

MIDDLE EAST

In Mena yesterday the long end was a bit heavy with the ARAMCO curve continuing to underperform and KSA following. KSA 47 fell 40c to mid-98 levels, with a similar move in Aramco 49s, down to mid-97 levels. Higher beta names also weakened slightly with BHRAIN 47 down 20-30c to low 107 levels. Egypt outperformed on the other hand with both EUR and USD curves 50-75c better in price on average, rebounding from a recent sell-off. The performance came on the back of the GDP growth figures for the  1H2018-19 showing improvement (5.6% vs 5.3% YoY) according to preliminary Planning Ministry figures, while the House of Representatives has voted in favour of constitutional amendments, that will allow the extension of presidential terms and reinstation of the upper house of parliament if approved in a national referendum. Recently Issued EGYPT 25E was seen bid at par again, while EGYPT 31E was up 75c to be bid at 99.

TURKEY

In the Turkish space yesterday, the bonds have finally started to rally with all sovs, fins and corps up 50c+ at least in price terms. Turkey 47 was seen bid at low 77 area while better buyers were snatching up short end offers in corps and fins. The move came on the back of the Turkish industrial production data coming at levels better than expected with growth coming at 1.3% in February, vs 0.3% expectations.

LATAM

Brazil House speaker Rodrigo Maia expects the committee on pension reform to start discussions this week seemingly spelling a thawing of the frosty ties between him and President Jair Bolsonaro. While the market had welcomed the President’s move to overhaul the nation’s pension system (saving some $257 billion in the process), the souring of relations between the President and the House Speaker had spilled onto the markets with the Bovespa losing 4.7% in the last month while the real weakened to levels last seen pre-elections last year. The yield on BRAZIL 47 lost 1bp in yield to close at 5.7973

RUSSIA

The ruble traded just about flat to close at 64.235 against the dollar while bond yields did not change much as well as the market awaits the Finance Ministry’s announcement of today’s bond auction terms. Russia 10Y local bond yields continued with their growth by adding 1bp to close at 8.25% having “visibly” outperformed the rest of the EM space according to VTB Capital.