After the turmoil during the middle of last week, and the following bounce to end it, the question was whether stocks could build on those gains into the new week. Currently, European stocks stand thusly;
- FTSE -0.7%
- Cac -1.0%
- Dax -1.4%
- Ibex -0.5%
- FTSE Mib -0.9%
There was a slim chance that the weekend GPIF news, pertaining to the increase in buying ratio to 25% from around 12%, might have sent little waves into markets overseas but we’ve not seen it. So, stocks are back on the skids although off the lows, again the bounce looks weak.
Big news for stocks will be if the GPIF look to increase foreign stock holdings but as far as the Nikkei goes, we could seeing a little period of gains daily as everyone jumps in to front run the GPIF. How long that lasts is anyone’s guess and the potential trade will be to sell into that strength on the basis that equities aren’t exactly flavour of the month right now.
European bonds continue to see a run to safety with periphery bond yields all gaining.
- Italy 2.59% +9bp
- Spain 2.26% +9bp
- Portugal 3.46% +16bp
- Germany 0.851% -1bp
