The past week brought some rather interesting developments in several markets but mostly seemed to lead to an increase in risk appetite thanks to central bank actions, bailout plans and accelerated vaccination in the US.
Of the popular markets, the Euro Stoxx 50 Index seemed to gain the most over the past week, rising by nearly 4.5% over the period. European equities may benefit from both the weakening euro against the dollar and the European Central Bank's announcement to increase the pace of asset purchases under its PEPP programme, allowing yields in Europe to remain low and not rise as fast as in the US. The Euro Stoxx 50 index is followed by Germany's Dax, which may rise by over 4 percent this week. European sentiment may also be boosted by the aid package signed by Joe Biden for the US economy, which will allow it to import more, which may help its trading partners.
Among the US indices, the Dow Jones seems to be the best performer, rising by 3.3%. In the United States, there is a lot of talk about rising bond yields. This may, in turn, hit technology companies the hardest and also lead to possible migration of capital from growth companies to value companies, which are currently listed on the DJIA index. Meanwhile, the Nasdaq 100 seems to have gained only 1.5 percent in the past week, and the S&P 500 is up 2 percent.
On the currency market, the Australian dollar seems to be the strongest, having appreciated by around 0.8% over the week, with the AUD/USD exchange rate testing the 0.7800 level again. The euro and the dollar had a rather turbulent week. The EUR/USD exchange rate on Friday seems to be stuck where it was on Monday, i.e. in the region of 1.1920. However, in the meantime, the quotations have moved from 1.1830 to 1.1990.
It is impossible to ignore this week's events from the cryptocurrency market, where on bitcoin there was already almost no trace of the previous strong correction of two weeks ago. On Friday morning, BTC/USD was again at the level of $58,000, which is where it was in the second half of February, at its historical peak. BTC/USD and ETH/USD are up about 14 percent in seven days and remain in a potential uptrend.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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