This week was very quiet, with no Central bank, no major macroeconomic data and little market movements. Developed equity markets were slightly down, emerging market equities up, bond yields lower as well as the dollar. Yet small, these moves are more or less offset by Friday’s trading session.
Still, we should note :
- Mr. Trump’s press conference was a great Trump moment but nothing that can give us some precision about measures that will be taken when he gets into the oval office.
- US retail sales, overall in line with consensus
- ECB minutes informed us that tapering decision was taken with a large consensus and “some” were in favor of a harder move. This supports our bearish view on Euro fixed income
- Chinese FX reserves continue to go down, which is logical with a currency under pressure and a central bank forced to intervene to support its currency. It is more or less the same that happened early last year, and it has been going on for months, but markets are now convinced that everything is under control…
- The beginning of the earning season in the US with banks starting off. Earnings are decent, hence supporting the market; for the moment it’s as usual.
Next weeks will be dominated by more earnings releases, that we anticipate to be positive and act as a support for equity markets, at least from a short term point of view. We will as well have the ECB on Thursday, which should not announce anything. There is however a possibility that journalists ask Mr. Draghi about inflation data that came out above expectations, especially in Germany.
Kind Regards.
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