After a sharp sell-off due to the Euro election, European indices recovered slightly in the last week, benefiting from record highs on Wall Street and a better picture of some hard-hit sectors. . However, political uncertainties are likely to remain a source of volatility in the lead-up to French elections, with the risk of further major sell-offs, especially if US technology stocks show some signs of weakness at the end of the week.
In the energy sector, MarketScreener says, oil continued to rally this week with a weekly gain of around 3.60%. A drop in US inventories, a recovery in fuel demand and the prospect of an easing of Fed monetary policy combined to support crude oil prices.
At the same time, the risk premium related to geopolitical frictions will return to the fore. Among them is the rising tension between Israel and Hezbollah in Lebanon. On the price front, Brent traded higher at around $85.5 per barrel, while WTI traded at around $81/barrel.
Unlike oil, metals are moving lower because their main catalyst, Chinese demand, remains volatile. China’s latest economic data on the country’s manufacturing sector did not provide any further direction, as industrial production rose 5.6% last month, but that was below the forecast for an increase of 6.2%. .
A ton of copper was traded for $9,858 in London, while in precious metals, an ounce of gold slowly but steadily rose to $2,366.
In terms of agricultural products, wheat was hit hard, falling to an annual low due to good crop prospects in the northern hemisphere. A bag of wheat was sold for about 587 cents, compared to 700 cents at the beginning of the month.
Fear of macros
As noted in the analysis, the recent reduction in interest rates does not necessarily equate to future monetary easing for the reasons we would like to believe. While the Fed has every intention of returning to a more accommodative stance, it must be said that some of its officials are struggling to find encouraging messages in inflation data, especially for services, that will allow them to make the…policy shift.
Therefore, the central banks of Australia, Norway and Britain prefer to adopt a waiting attitude, while the ECB, after cutting interest rates by 25 basis points at the beginning of the month, intends to … will take his time before continuing with the news. Only the Swiss central bank made a clear U-turn, cutting key interest rates for the second time in a row, mainly to support its currency, which, as a safe haven, benefiting from the uncertain political climate that currently exists in Europe. Even the star of the stock market, artificial intelligence, seems to have lost its momentum.
Cryptocurrencies are “we”.
In the cryptocurrency space, Bitcoin fell for the second week in a row, falling almost 9% in the last 14 days.
Ethereum also decreased by 3.8%, despite relatively good news, after the US Securities and Exchange Commission (SEC) investigated Consensys, one of the leading companies in the industry, which operates one of the most popular ” unhosted” wallets : Metamask. For some experts, this may mean that Ethereum will be classified as a product, like Bitcoin, rather than a “financial security”, which changes the regulatory situation and the processes that must be followed by those company. Despite this “good news” on paper, Ethereum is down slightly more than Bitcoin this week, but is still trading lower for the fourth week in a row.
If we only look at the macroeconomic data, then there is a negative trend. In recent weeks, economists’ expectations have almost always been overly optimistic, especially in the US. Investors needn’t… protested, because it reinforces the scenario of a cycle of interest cuts by Western central banks.
In the United States, several indicators (confidence, employment, orders, income, etc.) will allow us, the analysis notes, to refine our analysis until the May PCE inflation data is released on Friday. Interest was also focused on financial results to be announced this week by major companies, including FedEx and Nik