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Despite another expected rise in official rates (in the Eurozone), equities outperformed bonds last week, maybe because investors think (or hope) that every successive tightening brings us closer to the end of the monetary cycle.

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.

A very positive week for equities, ‘risk assets’ as some like to call them, and a correspondingly negative one for bonds (‘safe assets’).

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.