12 June 2018
Bassanese Bites: Spot the Dot – Week beginning: 12 June 2018
Despite all the bluster from Donald Trump, it was a “risk-on” week for global markets, with the S&P 500 lifting by 1.7% since this time last Monday. The Index has now lifted by 7.8% since its low on February 8, to be off only 3.2% from its January 26 high. Bond yields also rose and the $US eased. Fading Italian concerns were one positive factor, with new Prime Minister Giuseppe Conte outlining he wants to both boost the budget deficit and stay within the EU – a clear headache for Europe, but not necessarily for global financial markets. A report that China had offered to import $US70 billion worth of US goods to head off a tariff war was also greeted positively, though whether this was merely “fake news” remains to be seen. Data wise, the US economy remained rock solid with a strong non-manufacturing ISM report, though lingering concerns over Europe persisted with a further 2.5% drop in German factory orders. The G-7 meeting came and went and, despite the theatrics, produced nothing much of a consequence for global markets to either fear or celebrate.
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