The S&P500 for the first time ever closed above 2000

Market movers today

• In terms of data releases we have a very light global calendar. In Germany the GfK consumer confidence for September is released. It is usually not a figure we follow closely but it is a bit interesting that consumer confidence has continued to increase in 2014, whereas business surveys have in general trended lower since January. The development in consumer confidence is in line with our view that private consumption in Germany is doing well, although the economy contracted in Q2.

Selected market news

It seems like ‘optimism’ – at least for now - is winning in the tug-of-war in global financial markets between optimism about the US economy and fears over the Ukrainian- Russian crisis. Or, said in another way, the global stock markets continue to inch higher and in the case of the US stock markets we continue to see new record highs on a daily basis these days. Yesterday the S&P500 for the first time ever closed above 2000.

This morning the positive sentiment continues in the Asian stock markets, which are trading moderately up across the board. The stock market rally is being helped by optimism about the US economy.

Yesterday data showed that the Conference Board’s consumer confidence index rose to 92.4 in August, up from 90.3 in July. This is the highest level since October 2007 – so at least for the US consumer it could look as if the Great Recession has finally come to an end. Strong US data on durable goods orders also helped lift the sentiment in the US and global stock markets overnight.

On a slightly less positive note, worries in the markets continue over the situation in eastern Ukraine where fighting continues between rebels and the Ukrainian military. There was, however, a bit of positive news yesterday, as Russian president Vladimir Putin and Ukrainian president Petro Poroshenko met in Minsk. Even though there apparently was no break-through in the talks, both presidents commented positive on the meetings and signalled that further consultations over the crisis would continue.

In the currency markets EUR/USD continues to inch lower, as the markets are betting on new measures to ease monetary policy in the euro-zone and at the same time continue to become more optimistic about the outlook for the US economy. This is also reflected in the continued widening of short-term bond yields in the US and the euro-zone.