Week in Review
Equity markets continued to test all-time highs last week as the US Senate approved a $4 trillion budget measure and should help pave the way for tax reform, which is now a key focus for the administration. Earnings season also picked up pace last week, where over 14% of the S&P 500 has now reported – with 70% beating earnings-per-share expectations. • The yield on the bellwether US 10-year treasury rose over the course of the week; helped by the Senate budget agreement. Markets were also focused on speculation as to who will replace Janet Yellen as Fed Chair, with a decision expected in the first week of November. • In Europe tensions in Spain deepened as the central government took steps to impose direct rule on Catalonia, as the president of the region refused to back down on his succession demands.
1 Week Return
15.09.17 to 11.09.17
Year to date Return
31.12.16 to 22.09.17
|Local Currency %||Euro %||Local Currency %||Euro %|
|Global (euro)||FTSE World (total return)||0.7%||0.7%||6.9%||6.9%|
|Europe||FTSE Europe Ex. U.K||-0.1%||-0.1%||11.0%||11.0%|
|Hong Kong||Hang Seng||0.0%||0.4%||29.5%||15.2%|
|Bonds||Merrill Lynch Euro over 5||-0.3%||-0.3%||-0.4%||-0.4%|
The global index in euro terms was up 0.7% last week, led by the US and Japan, which was buoyed by the reelection of President Abe. Gold fell nearly 2%, as a more ‘riskon’ sentiment permeated markets. Oil was relatively flat over the course of the week, and finished at $51.50. The influential US ten year bond yield moved to 2.38% from 2.27%. The German equivalent stood at 0.45% from 0.40% a week ago, and has been trading in a tighter trading range recently. The EUR/USD rate closed at 1.18 whilst EUR/GBP was at 0.89.
The Week Ahead
|Tuesday 24 October||Thursday 26 October||Friday 27 October|
|Flash eurozone manufacturing PMI data is released for October, which will give an early insight into how the key economies in the currency bloc performed last month.||No change in policy is expected when the ECB meets for its latest interest rate decision. However, the commentary will be closely watched for details on any potential QE tapering.||Preliminary GDP data for the US goes to print, with the Q3 figure forecast to come in at 2.5% (quarter-onquarter).|