Current market commentary
Many asset classes are currently taking on a life of their own. Bond yields have risen markedly in the wake of the somewhat hawkish Fed, only to fall sharply the next day. The U.S. dollar has appreciated, while gold retreated more than 6% from its peak. Stock indices barely moved - although there were strong moves under the surface. Tech stocks shot up and cyclicals slipped. Market participants seem to have reduced their reflation expectations somewhat. However, the option expiration date last Friday may have been at least partly responsible for the sometimes erratic movements. With the increase in traded option volume in recent months, the influence of the options markets on cash markets has increased. However, the focus is likely to return to fundamentals with the Q2 reporting season starting soon. Analysts are optimistic and pre-announcements are positive, however equity markets have already priced in a lot.
The Q2 reporting season is picking up speed. In the coming weeks, more companies in both the S&P 500 and the STOXX 600 will present their key figures. The aim is to beat the high expectations of market participants. In addition to corporate reports, central bank policy is likely to remain important for the markets, as increasingly restrictive tones are being sounded. The market is thus eagerly awaiting the monthly meeting of the Bank of England on June 24. On Wednesday, the preliminary June Purchasing Managers' Indices (PMIs) for Europe and the US will be published. These should provide further insight into the economic recovery. This will be followed on Thursday by the business climate for Germany (Ifo, Jun.) and for France (Insee, Jun.) as well as new orders for durable goods for the U.S. (May). In the following week, the ISM index, consumer confidence and labour market data for the U.S. (Jun.) and German labour market data (Jun.) are due again.