Markets Update: Change is on the cards

Trading room at Zurich Life Investments Ireland

There was uncertainty across the markets last week and an air of caution ahead of Donald Trump’s inauguration, writes Ian Slattery.

It was a choppy week for markets as rhetoric from President-elect Donald Trump was somewhat offset by stronger economic data and well-received bank earnings, which were released on Friday.

Small business sentiment in the US rose in December to its best level in 12 years, and this reiterated the more optimistic outlook seen in the November figures.

Ian Slattery

The atmosphere on Wall Street was cautious early in the week as Trump’s first press conference since his election victory disappointed in respect to policy detail. However, Q4 figures from JP Morgan, Well Fargo and Bank of America helped lift the mood towards the end of the week.

JP Morgan rose to a record high as a post-election rotation into the ‘Trump Trade’ lifted investment banking revenues.

Gold continued its 2017 recovery, and briefly hit the $1,200/ounce level for the first time since November. Oil on the other hand fell 3% in a volatile week of trading.

The global index was down slightly in euro terms (-0.1%) as markets digested a mixed week of news.

Gold continued its 2017 recovery, and briefly hit the $1,200/ounce level for the first time since November

Copper continued its robust start to the year, returning 5.7% for the week.

As mentioned earlier gold was up to finish at €1,198/ounce, and whilst oil closed down at $52/barrel, it continues to remain above the key support level of €50.

The US 10 year bond price rose slightly over the course of the week, as the yield declined from 2.42% to 2.40%. The yield on the equivalent German Bund moved in the opposite direction, closing the week at 0.34%, from 0.30%.

The euro was up against the dollar over the week, with the EUR/USD rate closing the week at 1.06. It also rose against sterling, to 0.87 from 0.86.