Week was little active on equity indices this week, with a rise of 0.3% for the S&P500 and a slight decline of 0.3% for the STOXX600NR. Little activity to report during the Christmas hollidays on the equity markets, but on the other hand significant movements on the front of currencies and commodities.
In the first place, WTI oil prices broke the $ 60 mark this week, following lower than expected US weekly inventories. The $ 60 represents a long-term resistance for the WTI, which in the event of confirmed breakout could trigger a rise towards the $ 70 and a trend which would become again bullish. The oil exploration and production sector (US and Europe) is accelerating, as are the raw materials and mining sectors (CRB and BRE ETFs for Europe), which are taking over technology stocks as markets drivers.
The WTI surged above 60$ : DBO (ETF Powershares DB Oil Fund) weekly data
In addition, another major movement took place this week, it is the appreciation of the Euro against the Dollar, which reaches again the 1.20 level without there being news or statistics to justify this increase of about 2BP. Beyond this limit, certain sectors such as aeronautics or European technology may be under pressure. Gold profits from the decline of the dollar and increased by 2%
Gold on the rise again : IAU (iShares Gold Trust) weekly data
In contrast, the decline in the Dollar is good news for US exporters and the US market.
Despite a high valuation, the US market could benefit in 2018 from tax cuts that should have a significant impact on EPS, and therefore possibly from a USD/EURO decline. The rise in rates and oil should come in support to the markets at first but could quickly become a problem if this rise is too fast and too strong. On the rate side, a slight easing took place on both sides of the Atlantic after the sharp rise last week.
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Week was little active on equity indices this week, with a rise of 0.3% for the S&P500 and a slight decline of 0.3% for the STOXX600NR. Little activity to report during the Christmas hollidays on the equity markets, but on the other hand significant movements on the front of currencies and commodities.
In the first place, WTI oil prices broke the $ 60 mark this week, following lower than expected US weekly inventories. The $ 60 represents a long-term resistance for the WTI, which in the event of confirmed breakout could trigger a rise towards the $ 70 and a trend which would become again bullish. The oil exploration and production sector (US and Europe) is accelerating, as are the raw materials and mining sectors (CRB and BRE ETFs for Europe), which are taking over technology stocks as markets drivers.
The WTI surged above 60$ : DBO (ETF Powershares DB Oil Fund) weekly data
In addition, another major movement took place this week, it is the appreciation of the Euro against the Dollar, which reaches again the 1.20 level without there being news or statistics to justify this increase of about 2BP. Beyond this limit, certain sectors such as aeronautics or European technology may be under pressure. Gold profits from the decline of the dollar and increased by 2%
Gold on the rise again : IAU (iShares Gold Trust) weekly data
In contrast, the decline in the Dollar is good news for US exporters and the US market.
Despite a high valuation, the US market could benefit in 2018 from tax cuts that should have a significant impact on EPS, and therefore possibly from a USD/EURO decline. The rise in rates and oil should come in support to the markets at first but could quickly become a problem if this rise is too fast and too strong. On the rate side, a slight easing took place on both sides of the Atlantic after the sharp rise last week.