Financial markets update

November 12, 2017

 

  • Weakness in the American junk (high-yield) bond market prompted NRG Energy to pull a planned $870m bond sale on Thursday 9th of November. Two prominent high-yield ETFs run by State Street and BlackRock are down 2% this quarter, as commentators highlight the lack of new buyers coming into the market

  • Political upheaval in Saudi Arabia, combined with renewed trust in OPEC’s oil cuts, has helped drive the price of Brent Crude above $60 a barrel – hitting its highest level since July 2015

  • The S&P 500 showed its first weekly decline, of 0.2%, in 2 months. This came on the back of a mixed batch of earnings from companies as well as doubt over the Republicans’ ability to secure tax reform by the end of the year

  • Tax reform doubts further weighed on the dollar, which ended the week down 0.61% measured by US Dollar Index futures

  • The yield on 10-year Treasuries rose by as much as 5.5 basis points to just under the psychologically important 2.4% mark on November 10th

  • The pound fell 0.6% to $1.3084 on Wednesday 8th of November after Theresa May lost another cabinet minister, Priti Patel. This follows weakness after the MPC’s meeting on November 2nd, as although they decided to raise interest rates, the market is unconvinced that this marks the start of a tightening cycle

 

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