The week was rich in news and ended with a rise on the Stoxx600NR of + 0.86%, while the S&P500 posted ultimately a slight increase (+0,23%) due to a rebound on Friday attributable to healthy Q3 results from technology giants (Microsoft, Google, Amazon) while so far 74% of S & P500 companies have beat expectations against 72% in recent quarters.
The US economy unexpectedly maintained a steady pace of growth in the quarter, GDP grew by 3% between July and September compared to the expected 2.5%, higher investment and a lower trade deficit offset the decline in consumer spending and construction activity attributable to hurricanes.
In Europe, business results are also of good quality, which confirms the European cyclical recovery, but the strong rise of the week is definitely attributable to the ECB which confirmed the reduction of liquidity injections (QE goes from 60 to € 30bn per month until September 2018) but at the same time said it was ready to support the European economy by still injecting liquidity if inflation or the European economy showed signs of weakness. This caused the markets to surge as well as the fall of the Euro / USD around 1.16 and also a rate easing with a 10-year German around 0.42%.
On the negative side, Catalonia and Madrid have finally not reached a compromise, the Catalan parliament declared Catalonia's independence on Friday afternoon and Spanish senators gave the go-ahead to the government for the implementation of Article 155 of the Constitution, which allows the state to take control of an autonomous community, which has resulted in a limited decline in the Spanish index (-0.25% over the week).
A sensitive topic is also NAFTA (Free Trade Agreement in North America between USA, Mexico and Canada) challenged by D.Trump. Introducing taxes on exports to the United States would be very problematic for a large part of Mexican industries, as a result the Mexican peso is under strong pressure touching its lowest level since March while 10-year rates in Mexico went up 7% and the Mexican stock market index experience a significant consolidation.
The Mexican Index under pressure : EWW (iShares), weekly data
US 10-year yields continue to rise and are weighing more and more on the US bond market.
Another highlight of the week is the strong rebound of oil prices which retouches the level of $54 per barrel, driven by the comments of the Saudi Crown Prince supporting the extension of production cuts induced by OPEC.
Surge in Oil prices : DBO (PowerShares DB Oil Fund), weekly data
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The week was rich in news and ended with a rise on the Stoxx600NR of + 0.86%, while the S&P500 posted ultimately a slight increase (+0,23%) due to a rebound on Friday attributable to healthy Q3 results from technology giants (Microsoft, Google, Amazon) while so far 74% of S & P500 companies have beat expectations against 72% in recent quarters.
The US economy unexpectedly maintained a steady pace of growth in the quarter, GDP grew by 3% between July and September compared to the expected 2.5%, higher investment and a lower trade deficit offset the decline in consumer spending and construction activity attributable to hurricanes.
In Europe, business results are also of good quality, which confirms the European cyclical recovery, but the strong rise of the week is definitely attributable to the ECB which confirmed the reduction of liquidity injections (QE goes from 60 to € 30bn per month until September 2018) but at the same time said it was ready to support the European economy by still injecting liquidity if inflation or the European economy showed signs of weakness. This caused the markets to surge as well as the fall of the Euro / USD around 1.16 and also a rate easing with a 10-year German around 0.42%.
On the negative side, Catalonia and Madrid have finally not reached a compromise, the Catalan parliament declared Catalonia's independence on Friday afternoon and Spanish senators gave the go-ahead to the government for the implementation of Article 155 of the Constitution, which allows the state to take control of an autonomous community, which has resulted in a limited decline in the Spanish index (-0.25% over the week).
A sensitive topic is also NAFTA (Free Trade Agreement in North America between USA, Mexico and Canada) challenged by D.Trump. Introducing taxes on exports to the United States would be very problematic for a large part of Mexican industries, as a result the Mexican peso is under strong pressure touching its lowest level since March while 10-year rates in Mexico went up 7% and the Mexican stock market index experience a significant consolidation.
The Mexican Index under pressure : EWW (iShares), weekly data
US 10-year yields continue to rise and are weighing more and more on the US bond market.
Another highlight of the week is the strong rebound of oil prices which retouches the level of $54 per barrel, driven by the comments of the Saudi Crown Prince supporting the extension of production cuts induced by OPEC.
Surge in Oil prices : DBO (PowerShares DB Oil Fund), weekly data