The week was marked by a significant performance gap between Europe (Stoxx600: -0.26%) and the US (S & P500: + 0.9%) supported by the FED which has as expected increased its rates by 25bp and confirmed that there will be three new hikes in 2018 while inflation remains very weak.
Long term bonds (TLT iShares) get stronger amid FED actions : weekly data
At the same time it seems that the Republican leaders of the Senate and the House of Representatives have reached an agreement on this tax reform - which remains to be confirmed - which would represent the biggest overhaul of US taxation since 1986.
European markets have remained amorphous, despite the ECB's growth forecast for Europe rising to 2.3% and the prospect of a normalization of monetary policy, to be very gradual. All these news had virtually no impact on rates and on the Euro / Dollar which remains stable at around 1.18. The British parliament has disavowed T.May and now has the power to veto an agreement that he deems unbalanced with Europe, which darkens the situation that seemed to have made some progress recently
Stoxx600/S&P500 spread at ultimate low : weekly data
It is the absence of catalysts rather than specific concerns that can explain the sluggishness of European markets (DAX in first place), and thechristmas holidays seems already in force.
On the commodity side, a rebound occurred this week on metals, such as copper (+ 6%) and some agricultural commodities such as cotton (+ 3%). Oil remains at around $ 57 despite very high US inventories, and seems poised to accelerate upward at any favorable news.
European markets, however, are likely to remain fairly undirectional by the end of the year. Investors fear a correction from the US, as the indexes continue to fly from record to record and volatility is at historically low levels.
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The week was marked by a significant performance gap between Europe (Stoxx600: -0.26%) and the US (S & P500: + 0.9%) supported by the FED which has as expected increased its rates by 25bp and confirmed that there will be three new hikes in 2018 while inflation remains very weak.
Long term bonds (TLT iShares) get stronger amid FED actions : weekly data
At the same time it seems that the Republican leaders of the Senate and the House of Representatives have reached an agreement on this tax reform - which remains to be confirmed - which would represent the biggest overhaul of US taxation since 1986.
European markets have remained amorphous, despite the ECB's growth forecast for Europe rising to 2.3% and the prospect of a normalization of monetary policy, to be very gradual. All these news had virtually no impact on rates and on the Euro / Dollar which remains stable at around 1.18. The British parliament has disavowed T.May and now has the power to veto an agreement that he deems unbalanced with Europe, which darkens the situation that seemed to have made some progress recently
Stoxx600/S&P500 spread at ultimate low : weekly data
It is the absence of catalysts rather than specific concerns that can explain the sluggishness of European markets (DAX in first place), and thechristmas holidays seems already in force.
On the commodity side, a rebound occurred this week on metals, such as copper (+ 6%) and some agricultural commodities such as cotton (+ 3%). Oil remains at around $ 57 despite very high US inventories, and seems poised to accelerate upward at any favorable news.
European markets, however, are likely to remain fairly undirectional by the end of the year. Investors fear a correction from the US, as the indexes continue to fly from record to record and volatility is at historically low levels.