Gary Cohn’s resignation, although highly rumoured yesterday, was to have a negative effect on all markets once confirmed. The Asian indices held in initially, but only to fade into the close. The Shanghai core traded in positive territory for much of the day with the decline almost restricted to the final 30 minutes of trading. Yesterdays talk that cash provision ratios for bad loans could be cut certainly helped bank stocks. Talk that restrictions are closing to cool the Chinese property speculation probably had more of an impact than the resignation of Gary Cohn. CPI in China tomorrow. The Nikkei fell -0.8% having been trading positive mid session. The Yen has drifted back to a 105 handle during the late Asian mid European session and so we await the US flow. SENSEX closed down -0.9% but was not helped by talk that senior members of a large bank had been summoned by the SFIO (Senior Fraud Investigation Office) which pushed financials lower.

Europe followed the Asian uncertainty lower, but with the screen full of retaliatory trade headlines this move surely wasn’t a surprise. With all the posturing hitting the screens, actually the markets traded in a fairly narrow range. The DAX was the better of the core but none really deserved headlines. No new news from Italy as we watch BTP’s start to recover much of Mondays losses, with 10’s last seen around 4bp tighter at 2.05%.

For the majority of the day futures (early) later joined in negative territory by the cash market. At worst the index was off near 400 points, but as we approached the close rumours started to circulate. The talk coming from the White House is that it might not be a blanket tariff system for Steel and Aluminium imports as there may well be exceptions for Canada and Mexico! The market treated this mumble with a huge sigh of relief and we watched all core markets bounce taking the Nasdaq, Russell and S+P all into the positive. This was the positive that many needed as even a better than expected ADP jobs number was not enough to turn markets earlier in the day. Being the first Friday in the month, at the end of the week we will see the Non-Farms report with many looking at the hourly earnings for positive signs. Russell and the Nasdaq both again outperformed the core, with DOW off around -0.3% whilst the S+P closed unchanged.