Europe: Although this story did underline a late rally in Chinese shares on Friday, the benefits diminished – if not disappeared – in the grand scheme of things, by the time the European session got underway. Fizzled Brexit negotiations were parsed, but weren't a significant sticking point for European traders, who were apparently more relieved about a modest easing of tensions between European bureaucrats and the Italian government about that countries fiscal problems – even despite a rating cut to Italian debt. The EUR and GBP ticked slightly higher, and JPY dipped as anxiety around European political stability and China's growth moderated slightly. However, US Treasuries declined throughout the day leading into the North American open, losing its haven bid, edging the yield on the 10 Year note to 3.19%.
Wall Street: US stocks delivered little in the way of upside, slowed by activity in tech stocks again. Earnings season hasn't delivered the lift so far to US equities as hoped, stifled instead by the effects higher discount rates are having on stretched valuations in growth/momentum stocks. The Dow Jones did close 0.26% higher – led by strong trade in consumer staples stocks and other defensives, along with financials, that gained on higher bond yields – however the more comprehensive S&P 500 was flat. Worries that earnings growth leading into 2019 will be dampened drove the mood in US markets, with the key litmus test for this hypothesis possibly coming this week, as traders prepare for earnings reports from the likes of Alphabet, Microsoft and Amazon.
ASX: SPI futures are indicating a 12-point drop for the ASX 200 against this backdrop, ahead of a day that should be of interest, given the possible impacts of a hung parliament in Canberra. In the recent past, when confronted with leadership challenges and the like, it’s proven a drag on the A-Dollar and the ASX 200. The banks have borne the greatest brunt, probably due to the regulatory crack down and the perceived unfriendly stance towards property and share investors by the Labor opposition – though it must be said, but this risk has already been priced in by investors. Friday’s trade saw the bank witness a continued pop higher from its oversold levels, keeping the ASX 200 trading flat for the sustained. Slightly higher commodity prices may aid the Australian share market in the day ahead; however, with little real impetus for rally today, perhaps a grind more-or-less sideways can be expected to start the week.