European markets were out of their trading range this week and ended up sharply up (SXXR: + 1.4%), as did the S&P500 (+ 1.6%).
This bullish break out, which had been anticipated by the DAX the previous week, was mainly driven by the cyclical sectors (Automotive in the first place, which benefited from the announcements of the Frankfurt show) and the financials, while rates were back on the rise this week.
Unexpected Bounce back from banks (ETF Lyxor BNK) : weekly data
After a summer marked by geopolitical tensions with North Korea, markets seem now to be more focused on economic fundamentals. And these are in continuous improvement in Europe, in a context of low rates which justifies a certain optimism.
The week was marked by several catalysts: first, the Euro seems to flatten versus the dollar and stabilized at the 1.20 level an equilibrium threshold that could persist. Moreover this week the Central Bank of England warned that the rates would be increased imminently (probably as early as November) due to inflationary pressures, which resulted in a sharp rise in the pound against the euro and the dollar this week and has revived at the same time rates in Europe (The 10-year Bund increased from 0.31 to 0.44%) and the United States (The 10-year US rose from 2.05 to 2.2% ).
On the other hand, oil is rebounding while hurricanes have disrupted production in the Gulf of Mexico and shale production has been lower than expected this summer in a context of strong global demand.
Profit taking took place on a large number of commodities (ex / Copper: -2.8%) in a context of stabilization of the dollar and of profits taking.
Profit taking on commodities and Mining sector (ETF Lyxor BRE) : weekly data
Emerging economies remain generally bullish, while the relative weakness of the dollar, rising crude oil prices and moderate interest rates favor emerging economies. The overall market situation is however paradoxical, because unusually, all asset classes rise at the same time, indicating both optimism (upward trend in equities and commodities) and also a certain touch of caution in a more chaotic world in transition, with an American leadership more and more contested, which is characterized by a rise in gold and bonds at the same time.
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European markets were out of their trading range this week and ended up sharply up (SXXR: + 1.4%), as did the S&P500 (+ 1.6%).
This bullish break out, which had been anticipated by the DAX the previous week, was mainly driven by the cyclical sectors (Automotive in the first place, which benefited from the announcements of the Frankfurt show) and the financials, while rates were back on the rise this week.
Unexpected Bounce back from banks (ETF Lyxor BNK) : weekly data
After a summer marked by geopolitical tensions with North Korea, markets seem now to be more focused on economic fundamentals. And these are in continuous improvement in Europe, in a context of low rates which justifies a certain optimism.
The week was marked by several catalysts: first, the Euro seems to flatten versus the dollar and stabilized at the 1.20 level an equilibrium threshold that could persist. Moreover this week the Central Bank of England warned that the rates would be increased imminently (probably as early as November) due to inflationary pressures, which resulted in a sharp rise in the pound against the euro and the dollar this week and has revived at the same time rates in Europe (The 10-year Bund increased from 0.31 to 0.44%) and the United States (The 10-year US rose from 2.05 to 2.2% ).
On the other hand, oil is rebounding while hurricanes have disrupted production in the Gulf of Mexico and shale production has been lower than expected this summer in a context of strong global demand.
Profit taking took place on a large number of commodities (ex / Copper: -2.8%) in a context of stabilization of the dollar and of profits taking.
Profit taking on commodities and Mining sector (ETF Lyxor BRE) : weekly data
Emerging economies remain generally bullish, while the relative weakness of the dollar, rising crude oil prices and moderate interest rates favor emerging economies. The overall market situation is however paradoxical, because unusually, all asset classes rise at the same time, indicating both optimism (upward trend in equities and commodities) and also a certain touch of caution in a more chaotic world in transition, with an American leadership more and more contested, which is characterized by a rise in gold and bonds at the same time.