Markets remain cautious start of week - ANZ

Analysts at Nomura explained that markets continued their cautious tone at the start of a new week.

Key Quotes:

"Equity markets were under downward pressure led by weakness in European bank stocks. Downward pressure on Deutsche’s equity price continued as it fell to a record low as uncertainty over looming fines and legal bills continued, as well as speculation of the need to raise capital increased. This led the Euro Stoxx 600 banks index to fall 3.2% which spilled over into the other major sectors too. All up the DAX dropped 2.2%, CAC 40 was down 1.8% and FTSE 100 lost 1.3%.

As is often the case when European bank shares fall, the euro strengthened. In the US, the major equity indices fell 0.8-0.9% with weakness again centred on financial stocks as regulator proposals for Banks to hold more capital draw closer. Amongst all this the VIX rose and gold was slightly firmer at $1344 oz (+0.2%).

Unsurprisingly, fixed income found support with the yield on the 10-yr US Treasury note easing to 1.58% (-4.1bps) and core European 10-yr yields lower too (by 3-4bps). Ahead of this week’s OPEC meeting in Algiers, oil rallied (WTI +3.6% to $46.1 pb) as hopes grow that the group may sow the seeds for greater stability in production going forward."