Extremely quiet week in this holiday period.
Yields have retrace part of their move (–7bps on the German 10Y and -4bps on US rates) while equity indices are showing little evolution (+0.9% for the EuroStoxx 50, +0.2% for the S&P 500 but -1.8% for the MSCI EM).
Few macroeconomic publication. The US service indicator came to confirm the good holding of the country’s macroeconomics. Seen as a whole, indicators remains positive and beat the consensus. For each of the globe’s major geographic areas, we have a positive economic surprise meaning that in average, each zone’s macroeconomic data beats the consensus.
While some markets remain on extreme levels (overbought Euro and US equities, oversold US rates), it’s interesting to note the strong come-back of the German 10Y with a Relative Strength Index coming back to median levels.
The current global context is oriented towards reflation and term premiums reconstruction. Monetary policies anticipations remain somewhat accommodative. Furthermore, economists forecast a 2.5% inflation for early 2017, which should make investors' enthusiasm for this asset class continue next year.