Roberto Plaja

Economic news was mixed last week, with China growing below expectations and inflation moderating. Markets continued to have a good run, especially equities.

The last three weeks have continued to be friendly to equities and somewhat hostile to bonds.

A turbulent week for equities and a relaxing one for bonds. Strange then that all the fuss was centered on inflationary news and how these would impact upcoming monetary policies.

The stock market has decided that central banks are close to the end of the tightening cycle. I think that is certainly true in relation to, say, 6 months ago, but I remain cautious because there are indications that further tightening may come and continue for longer than we would like.

Emerging market equities were the star of the group this week (+1.3% in Euro terms), reflecting perhaps a renewed enthusiasm for global growth prospects. Otherwise most of the non-financial news ranged between the hopeful (Trump’s indictment) and the horrific (Russian attacks on flood victims).

No comment. Don’t want to spoil the warm feeling we may get from looking at the figures.
Have a great Sunday.

These days one cannot escape an enhanced feeling of cluelessness, similar to the one exhibited by the poor animal in the cover picture.

Supportive news on inflation and improving prospects for less restrictive monetary policies pushed the markets higher, despite the increasing tensions about the debt ceiling negotiations in the US.

Markets had a relatively muted week, despite problems in the American banking sector and central bankers raising rates.

An inversion of results during the last week of April: bonds up, stocks down. This behavior seems to be associated with a revision of growth prospects, as evidenced by the outperformance – a rare occurrence in the last two years – of nominal bonds over inflation linkers.