Good Morning,


The fourth day of European stock trading saw little changes yesterday. The Euro Stoxx 50 was slightly down by 0.15% to close at 3284.28, whilst the FTSE 100 Index increased by a margin of 0.06% to end the day’s trading at 6843.11. The French CAC 40 was down slightly, closing at the 4554.40 level, a change of -0.02%. The German DAX also traded lower, closing at 9938.7, shedding of 0.11%. According to Herbert Perus, most investors still have an underweight stance on European equities, seeing an increase in risk in such equities. According to Perus, this is holding back the trading on such European stocks.


US stocks recorded the largest drop in three weeks yesterday evening. The Standard & Poor’s 500 Index dropped 0.71% to close at 1930.11 while the Dow Jones Industrial Average and the Nasdaq Index also closed below opening levels, dropping 0.65% and 0.79% respectively. This came on the back of rising oil prices which were significantly affected by increasing tensions in oil-producing Iraq. The WTI oil index rose 2% to trade at $106.53 per barrel, the highest level since September. This also paved the way for investors to seek to safety by adding exposure to Treasuries which recorded an increase in value towards the end of the trading session. Mixed signals related to the economic recovery is another reason for this movement in capital causing a drop in yield on the 30 year Treasury bond of 5 basis points, to yield 3.41%. The yield on the 10-year Note also fell 5 basis points to 2.60% whilst Gold added 1% in light of increased volatility. US Retail sales rose than expected in May while the jobless claims number increased last week. The World Bank has also revised lower its forecast for global growth.

The US Dollar was lower against a basket of currencies yesterday. The economic results mentioned previously may be leading investors’ expectation of unchanged interest rates for the time being as the economy remains sluggish.


The Pound appreciated against the Dollar and the Euro as Mark Carney, Governor of the Bank of England, said that England could raise its interest rates earlier than expected, expressing concern on the mounting of debt related to the housing market which could undermine economic stability. One must not that similar statements were put forward only a month ago. Are such statements simply raising speculation, or is such an increase in rates imminent? We will simply have to wait and see.


The Spanish government sold EUR 9 billion of new 10-year government bonds showing a greater demand for the country’s sovereign debt which continued to send out positive signals on the recovery of the Spanish economy. Contrary to most European Indices, the IBEX 35 also traded higher yesterday closing at 11088.50, up 0.12%. The yields on the Spanish 10 year dropped to a record level this week when compared to Belgian, Italian and Irish Sovereign debt.


Asia stocks also traded lower overnight on the back of the US’s disappointing economic figures. The escalating tensions in Iraq also had their effect on Asian trading. The Yen appreciated in value, benefiting from its safe haven status as investors sought safer havens. The highly anticipated action from The Bank of Japan resulted in unchanged monetary policy, only revising up its assessment on overseas economies.

Company News, Twitter

Yesterday, Twitter announced the departure of two of its senior executives, the company’s COO Ali Rowghani and Vice President of Media, Chloe Sladden who reported to Rowghani. It is understood that Rowghani, the influential No. 2 who oversaw Twitter’s product development, finances and dealmaking, departed after clashing with CEO Dick Costolo over whether or not he should continue overseeing production innovation.

Have a good Day,