2023-11-03 Markets
The last four weeks have been full of important events, the most visible of them linked to the wars in Ukraine and the Middle East. Looking at what financial markets did over the same period you would have never guessed much had happened. Here’s an arbitrary list of indices and some data on their performance since October 6 (as customary all indices are represented by ETFs in Euro terms):
Global equities +0.7% (approx. range: +2.5/-3.2%)
Global bonds +1.6% (+1.6/-0.4%)
EM equities +0.4% (+1.4/-3.3%)
Euro inflation linkers +2.5% (+2.5/0.0%)
Which were the major factors? The usual: monetary policy expectations and, to some extent, news on inflation. Remarkably, the war in the Middle East registered as a positive event: from October 6 to the 16th markets were broadly up. For bonds a substantial short position must have also helped, judging from the rapidity of the directional change starting in the last week in October. Remarkable stuff.
On a personal level, I can reassure you I did not sleep through all this, as one might infer from my silence. I am still adjusting to my new temporary set up, which has caused many unexpected – at times unpleasant – distractions. Today, even Bloomberg, the source of all my data, was misbehaving and did not allow me to connect until 14.00.
Hopefully this transition will be over by the end of the year.
[Cover: author’s photograph]
