US policy has marked the development of world financial markets this week. Tense negotiations between Republicans and Democrats to raise the debt ceiling (and thus avoid falling into default) have sparked a small earthquake in fixed-income markets, where each day that passed without an agreement, investors A little more was demanded to buy off the country’s debt.
Bills with lower maturities are the ones that have felt the most pressure. For example, in six months, the yield has risen to 6.8%. To give an idea, the figure was around 4.5% at the beginning of the year. In other words, investors are now demanding a lot more of that same bond.
European stock markets have also weathered a week of volatility that has turned from low to high, with strong gains on Friday on rumors pointing to an imminent agreement on the other side of the Atlantic.
Ibex-35 advanced 0.82%, which, however, was not enough to offset the accumulated losses since Monday of 0.65%. Selective thus walks away from the 9,200 points it had cost so much to beat.
In Friday’s session, Fluidra was the main gainer (+2.11%) followed by ArcelorMittal (+1.80%), Indra (+1.67%), Rovi (+1.64%), CaixaBank (+1.63%) and Acerinox (+ was ahead by 1.63%). +1.56%). On the other hand, Solaria (-0.94%), Sasir (-0.89%), Acciona Energias Renewables (-0.63%), Bankinter (-0.62%) and Unicaja Banco (-0.53%) remained the losers. ,
anxiety persists
In any case, and while waiting for a final agreement, nervousness will continue to mark the next sessions. Analysts indicated, “There are Republican leaders who were already hinting at a compromise on Thursday, which, in any case, we believe legislators from the most radical wings of both parties will not like.” That is, the discrepancies will remain strong even with the consent.
For now, investors are trying to rely on macroeconomic data that suggest the US will be able to avoid recession. This same Friday, the University of Michigan’s consumer confidence went out, a leading indicator for feeling the health of that pillar – of consumption – in the first world power. And the data was much better than expected. Notably, it rose to 59.2 points as compared to 57.9 expected by the market.
but beware. Because Friday was also known as the personal consumption price index (PCE), one of the inflation data the Federal Reserve (Fed) pays most attention to in setting its monetary policy. It unexpectedly rose to 4.4% in April, while the underlying rate (which excludes energy and fresh food) continued to climb to 4.7%.
Conclusion: Consumer resistance and extremely high inflation still reinforce the view that the country’s central bank may choose to raise interest rates again in June or July, moving away from an expected pause in the rate hike cycle that investors have been hoping for. has already considered it a few weeks ago.
