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Trade Talks Optimism

11 December 2018 by lberuti

It was a seasonably quiet session in terms of volumes, as Christmas liquidity is gradually setting in. The current level of uncertainty regarding political developments across the globe is not giving investors any incentive to add inconsiderate amount of risks. It has recently translated into exacerbated intraday volatility. Today, while indices reacted positively on hopes of renewed trade talks between the US and China after a statement saying Chinese Vice Premier Liu He discussed a timetable with US Treasury Secretary Steven Mnuchin by phone, the risk premia of single reference entities largely underperformed as names remain sticky to recent trading levels. Trade talk optimism benefitted one group though. Metal and Miners have been put under pressure since the beginning of October. The risk premia of GLENLN ( Glencore Plc ), MTNA ( ArcelorMittal SA ), and AALLN ( Anglo American Plc ) all rebounded off the recent wides they reached earlier in the month and closed 9bps tighter at 203bps, 210bps and 166bps respectively, which made Basic Material the best performing sector on the day among iTraxx Main constituents. Changing the time horizon – that can be achieved by clicking on the different time spans in the top left corner of the above grapple – will paint you a very different picture over the last week or the last month.