The last week of June was a period of significant volatility and declines in the global stock markets. During the whole past week, the German DAX went down by 2.2%, the French CAC40 declined by 1.2% and the British FTSE250 fell by 0.9%. In the US, the NASDAQ deteriorated by 2.4%, while the DJI and the S&P500 dropped by 1.3%. The market stopped to ignore the protectionism policy of Donald Trump. Investors clearly saw that the decisions and the announcements of the American president were not a form of negotiations – these were real actions within a trade war which covered China, EU, or Canada. Concerns related to the global trade war found their negative reflection in the market expectations regarded further condition of the world’s economy. Attention should be also paid to the latest macroeconomic data readings. In the US, the final release of the annualized GDP growth rate for the first quarter of 2018 failed (2% vs 2.2% projected).

Weekly comment MM Prime TFI  - June 25, 2018

Weekly comment MM Prime TFI  - June 18, 2018

Last week, the global market sentiment improved noticeable. However, concerns about the state of the Italian economy and its new government, as well as the risk of the outbreak of the global trade war were still important for investors. After all, this time the hawkish statements of the ECB representatives were in the spotlight. It cannot be ruled out that next ECB Governing Council meeting will bring a declaration regarding further future of QE – the market expects the program will be completed this year. As a result, the last week’s weakness of the European stock market indices (against Wall Street) and the appreciation of euro were not a surprise. Nonetheless, it is worth remembering that the prospect of the interest rates raises in the Euroland remains remote.

Weekly comment MM Prime TFI  - June 4, 2018