Havens such as the yen and German bunds continue to be in favour with investors, as the morning bounce in European markets fades and US indices struggle to recover from their hefty losses yesterday. The site of small gains across the board for equity markets marks a decent change of tempo from the unrelenting selling of the past week, but at the moment bullish investors can do little more than impotently shout into the gale of selling that has seen key benchmarks lose ground rapidly. It’s clear though that investor hesitancy about equities does not extend to company boardrooms, as deal-making from the likes of Zurich, Hikma and GKN continues to dominate the headlines. Zurich’s decision to come calling for RSA was, in a sense, inevitable, given the poor share price performance of the UK firm; the euphoric reaction in RSA’s share price seems to indicate investors will welcome a safe harbour within the comforting embrace of the Swiss insurance giant.
US indices posted small gains at the open that have done little to eat into the big falls of the past few sessions. With the Fed meeting now underway, all eyes are on what Janet Yellen and co will say tomorrow; US dollar weakness persists however, after manufacturing PMI figures from the US inched higher in July. The US economy might not be sputtering, but nor is it racing ahead, and as a result the 20% surge in the US Dollar Index over the past year is starting to look a little overexposed.
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GBP/USD holds steady above 1.2600 as markets stay calm on Good Friday
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Gold price sits at all-time highs above $2,230, US PCE eyed
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Jito price could hit $6 as JTO coils up inside this bullish pattern
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Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.