Market Review – Fundamental Perspective 22 December 2017

Asian equity markets rose overnight whilst their US counterparts broadly fell as US growth data came in slightly below consensus at 3.2% y/y. In FX, EUR fell against all G10 peers on the back of Catalan separatists winning the regional elections and news that Germany’s politicians still consider the possibility of a minority government in coalition talks.
In Spain, the pro-independence parties retain majority in Catalonian parliament which prompted EURUSD to drop to below 1.1820.
In line with recent polls and Barclays Research, the three pro-independence parties (JxCAT, ERC and CUP) won a majority of seats in the Catalonian parliament: 70 MPs out of a total of 135, which is two MPs less than they won in 2015 which could cause continued pressure on political stability in Spain and the EU.
In EM, MXN underperformed and dropped to the lowest level since March against USD as a result of a corruption probe involving the ruling PRI party.
Merry Christmas and Happy New Year. This publication will resume on the 2rd of January 2018.

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