Sadly at the price of stocks
We should kick off the week with some good news, right? The euro made some headways despite the inability of German chancellor Merkel to form a government. Sadly it came at the cost of stocks.
The DAX fell to a seven week low. The Stoxx Euro 600 lost ground as well. But investors assessed the situation and concluded that the developments in Germany won’t be a shock for the regional economy. This is why the euro made up ground from the initial losses.
On the other end of the globe, Chinese shares reversed losses as they assessed the implementations of curbing shadow banking. In the US the spread ‘tween 2-year and 10-year Treasuries widened to a decade-high.
WTI remained at above $56 after Friday’s massive loop. A reminder that that was because of Saudi Arabia’s declared plans to extend output cuts.
Big news is that Yellen hands her resignation to Trump and oil retreats
А good day for stock trading has it been! The greenback gained and shares went up as gold scored its biggest drop in 2 months. Congress took a holiday break from tax negotiations and the market absorbed the political news from Europe and the Americas.
But to the big news of the day, albeit not the most significant is Fed chair Yellen’s official resignation to President Trump. It will come into effect the moment when new chair Powell swears into office.
Investors hardly reacted to her resignation. S&P 500 went up after two weeks retreats. But it went down a bit after information came out that the US is about to sue AT&T’s takeover of Time Warner.
The prevailing opinion among traders is that Powell’s policy ideas won’t differ fundamentally from Yellen’s.
In Germany Angela Merkel said that she prefers new elections to forming a minority government. Still the DAX made headway.