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Weekly Investment News - 30 May 2016

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Posted on: 30 May 2016

Equities deliver strong returns, in quiet week for economic data.

 

 

Week in Review

  • It was a quiet week for economic data, but the tone was generally positive for the US and Europe. Strong housing and trade data were released in the US whilst Europe saw strengthening GDP figures in both Germany and Spain. Oil also held up in the face of a strengthening dollar, and the risk of Brexit abated further.

 

  • The G7 summit in Japan concluded without any major policy coordination announcements; although expectations were muted from the outset. The final statement however did suggest monetary policy in isolation could not ‘lead to strong, sustainable and balanced growth’.

 

  • Fed Chair Janet Yellen also stated on Friday an interest rate hike is ‘probably’ appropriate in the coming months as Fed and market expectations of a rate hike continuing to converge.

 

  Index

1 Week Return

20.05.16 to 27.05.16

Year to Date Return

31.12.15 to 27.05.16

   

Local Currency

%

Euro

%

Local Currency

%

Euro

%

Global (Euro) FTSE World (total return) 2.2% 2.2% 1.1% 1.1%
US S&P 500 2.3% 3.3% 2.7% 0.2%
Europe FT/S&P Europe Ex. U.K. 3.4% 3.4% -4.9% -4.9%
Ireland ISEQ 4.4% 4.4% -4.2% -4.2%
UK FTSE 100 1.9% 3.7% 0.5% -2.6%
Japan Topix 0.5% 1.3% -12.8% -6.2%
Hong Kong Hang Seng 3.6% 4.7% -6.1% -8.6%
Bonds Merrill Lynch Euro over 5 0.6% 0.6% 5.2% 5.2%

 

The global index (in euro terms) had a strong week returning over 2% and pushed into positive territory for the first time this year (1.1%).

 

Irish equities returned 4.4% for the week, delivering a greater return than most of the major indexes.

 

Oil rose once again posting a 3.3% return in local terms, and is now up over 30% year-to-date. Gold fell back over 3% in local terms as market risks abated somewhat.

 

The EUR/USD rate strengthened to finish the week at 1.11.

 

10 year US treasury yields were relatively flat, finishing the week at 1.85%, from 1.84% a week ago. The German equivalent fell slightly from 0.16% to 0.14%.

 

 

The Weeh Ahead

 

Tuesday 31 May Thursday 2 June Friday 3 June
Eurozone unemployment figures for April go to print with the forecast for no change at 10.2%. The ECB Governing Council meets where no announcements are expected following the two packages in December and March Nonfarm payrolls for May are released in the US with the consensus for an increase of 170k, up from a last reading of 160k.

Brosnan Boylan Golden Ltd, 128 Bank Place, Mallow, Co. Cork. is regulated by the Central Bank of Ireland.

Brosnan Boylan Golden Ltd trading as Farm First Insurance is regulated by The Central Bank of Ireland.

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