The rise in US equity intensified this week, with new record highs on the three leading indices, the S & P500, the Nasdaq Composite and the Russell 2000 (small caps).
The bullish sentiment is reinforced by the fact that the economy is becoming less and less cyclical, that the productivity gains provided by technology seem to allow a more steady growth and without significant inflation. In the short term, D.Trump's tax reduction program is an important support to markets, while expected rate hikes are moderate and should be able to be absorbed by the economy.
In Europe the Stoxx600 rose slightly (+ 0.36%), despite the Catalan referendum which represents a real risk for the zone. At the same time, the Spanish index declined by only 1.9% and Spanish long-term rates improved moderately, indicating that markets are not currently expecting a real crisis, as Europe is so far clearly opposed to the independence of Catalonia, and economic pressure is beginning to mount with the main banks (Banco Sabadell and Caixa) relocating their headquarters and other companies that seem ready to move. With only 42% participation, a lack of democratic debate and no constitutional legitimacy, the proclamation of independence programmed by the regional government resembles a dangerous leak forward but whose consequences are still difficult to assess. Mediation becomes more complicated, given the intransigence of both sides, but what seems already to emerge is the technical impossibility of a Catalonia that is both independent, part of Europe and financially autonomous. It is probable that the Catalan political unity will be ultimately be fragmented in the face of the potential economic disaster that would emerge with the flight of capital and business and the impossibility of financing itself on the markets.
LYXIB (Lyxor) : Spain under the pressure of the catalan referendum
The Euro has continued to crumble slightly against the dollar, but remains fairly firm on the 1.17 levels, so it is rather a limited consolidation.
US rates continue to rise moderately, despite a decline in unemployment statistics in September (33,000 jobs destroyed), a result of hurricanes in the Golf of Mexico and Florida.
Commodities such as copper and nickel began to rebound this week, another sign of confidence in the global economy.
BRE (Lyxor) : Rebound of the European Mining Sector
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The rise in US equity intensified this week, with new record highs on the three leading indices, the S & P500, the Nasdaq Composite and the Russell 2000 (small caps).
The bullish sentiment is reinforced by the fact that the economy is becoming less and less cyclical, that the productivity gains provided by technology seem to allow a more steady growth and without significant inflation. In the short term, D.Trump's tax reduction program is an important support to markets, while expected rate hikes are moderate and should be able to be absorbed by the economy.
In Europe the Stoxx600 rose slightly (+ 0.36%), despite the Catalan referendum which represents a real risk for the zone. At the same time, the Spanish index declined by only 1.9% and Spanish long-term rates improved moderately, indicating that markets are not currently expecting a real crisis, as Europe is so far clearly opposed to the independence of Catalonia, and economic pressure is beginning to mount with the main banks (Banco Sabadell and Caixa) relocating their headquarters and other companies that seem ready to move. With only 42% participation, a lack of democratic debate and no constitutional legitimacy, the proclamation of independence programmed by the regional government resembles a dangerous leak forward but whose consequences are still difficult to assess. Mediation becomes more complicated, given the intransigence of both sides, but what seems already to emerge is the technical impossibility of a Catalonia that is both independent, part of Europe and financially autonomous. It is probable that the Catalan political unity will be ultimately be fragmented in the face of the potential economic disaster that would emerge with the flight of capital and business and the impossibility of financing itself on the markets.
LYXIB (Lyxor) : Spain under the pressure of the catalan referendum
The Euro has continued to crumble slightly against the dollar, but remains fairly firm on the 1.17 levels, so it is rather a limited consolidation.
US rates continue to rise moderately, despite a decline in unemployment statistics in September (33,000 jobs destroyed), a result of hurricanes in the Golf of Mexico and Florida.
Commodities such as copper and nickel began to rebound this week, another sign of confidence in the global economy.
BRE (Lyxor) : Rebound of the European Mining Sector