DB Today -Global/Macro:Tuesday,20th December 2016

The biggest impact in markets from the events was in FX where the TurkishLira (-0.75%) in particular underperformed, along with a number of other EMcurrencies. The MSCI EM equity index also closed -0.62% and so declining forthe fourth consecutive session. In developed markets the feeling was generallycautious but resilient. The Stoxx 600 (-0.12%) closed a touch lower while theS&P 500 (+0.20%) edged slightly higher although unsurprisingly on seasonallythin trading volumes. The most interesting price action continues to be insovereign bond markets. 10y Bund yields closed 6.9bps lower yesterday at0.241% and have now moved up or down by at least 3.3bps for each of thelast six sessions. 10y Treasury yields also dipped 5.3bps lower to close at2.539%. While there was some suggestion that the moves reflected safehaven flows it appears that the blame was more last minute position clearinginto year-end than anything else. Details on page 06