Our Market analysis: 20/04/2018

This week was fairly stable for equity markets, with the S & P500 and Nasdaq100 rising 0.5% over the period, while in Europe the Soxx600NR rose 0.85%.

The week was punctuated mainly by corporate results, with in particular the underperformance of IBM which weighed on the US indices.

Moreover, after the fears of commercial war and geopolitical issues have receeded, investors' fears have now moved back to long-term rates, which reach 2.96%, and the return of inflationary pressures that could prompt the FED to tighten its monetary policy. 

10Y T-Bonds resume decline (IEF iShares ETF)

Despite the easing of tensions in Syria, oil has continued its upward momentum and has overcome the significant resistance of $ 68, as important deadlines with Iran are approaching in particular that of May 12 that will determine whether the US is exiting from the nuclear agreement with Iran. If this is the case, new tensions are expected in the Middle East with the key to a new appreciation of the geopolitical premium and the price of a barrel.

WTI on 2 years high (DBO Powershares ETF)

These pressure on rates and inflation weighed in the short term on gold prices which fell 0.7% this week. The Euro/USD parity remains very stable at 1.23.

Markets are expected to continue to be somewhat directional in the near term, and evolve with business results and the continued rise in long-term rates.