Our Market Analysis: 03/03/2018

This week was marked by a new fall that led the Stoxx600NR to fall by 3.67% and the S & P500 which fell by more than 2% following D.Trump's decision to tax imports of aluminum and steel, which risks provoking a trade war with China and the main trading partners of the US, Europe in particular. Protectionist attitudes have in the past always had negative effects on world GDP growth and markets are not mistaken, because there will be an inevitable response to the actions of the US administration with a risk of negative spiral that may weigh on global trade and will only make losers.

Strong decline of the DAX : weekly data

Volatility has logically returned above the 20s signaling a return of bearish pressure, but with less intensity than during the first downside leg.

The short-term rebound on the US indices finally failed, and the actions of D.Trump have resulted in a decline in markets for 4 consecutive days which implies the possibility of retesting the level of the first wave of decline.

The theme of inflation and rate hike has been less present this week, while fears are more about global growth in the event of a trade war, however long rates remain around the 2.85 level, implying that this theme remains intact.

The Euro / Dollar is stabilizing around 1.23 which marks a certain stability inside the 1.2 / 1.25 range.

Gold rebounded slightly this week, amid fears of a new trade war between China and the US.  

Gold strengthens after US protectionist actions: IAU (iShares Gold Trust), weekly data