Global equities were higher, but strengthening euro tempers return, writes Ian Slattery in his weekly review of the markets.
Markets grinded higher last week as Q3 earnings season kicked off with announcements from the big US financials. Tech firms take the limelight this week with the likes of Amazon, Microsoft and Twitter all reporting.
Economic data came in largely below expectations this week, as evidence of a broadening slowdown begins to mount. On the other hand, the probability of a US interest rate cut at next week’s Federal Open Market Committee meeting continues to rise, partly on the back of the weakening data.
Chinese Q3 GDP growth slowed, albeit to a still strong 6%. However, the market response was muted as lower, more sustainable, growth has been an explicit policy aim of the Chinese authorities in recent times.
As for Brexit, there will likely be further developments over the coming days. In wider European politics, Swiss elections results were as expected and saw strong gains for the Greens, in line with the environmentalist movement seen across Europe.
Global equities were up slightly last week but evidence of a slowdown begins to mount. Closer to home, Ireland was up 0.4% this week and up 21.7% year to date.
Fixed Income & FX
The US 10-year yield recovered further last week to finish at 1.77%. The German equivalent finished at -0.36%. The Irish 10-year bond yield finished at 0.06%. The Euro/US dollar exchange rate finished at 1.12, whilst Euro/GBP was at 0.86.
Oil finished the week at $54 per barrel. Gold finished the week at $1,491 per troy ounce. Copper increased to $5,785 per tonne.
The week ahead
Tuesday 23rd October:
Microsoft, Tesla, and Boeing all report earnings.
Wednesday 24th October:
Both US and Eurozone , for September goes to print.
No change is expected as the ECB meets for its latest interest rate decision.
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