Last week’s bullish sentiment that sent the S&P not only to a new all time highs, but a burst of last-second buying pushed above 2,500 for the first time ever, has carried through to the new week, with European and Asian shares rallying across the board, US futures again the green, and world stocks hitting a new record high on Monday ahead of a historic Fed meeting in which the FOMC is expected to announce the start of the shrinkage of its balance sheet.
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‘The FOMC’s latest verdict will be of special interest,’ said Daniel Lenz, an analyst at DZ Bank in Frankfurt. ‘The Fed could well set the balance-sheet-reduction process in motion.’
MSCI’s index of world stocks hit a new all-time high, adding to gains seen on Friday when Wall Street set its own record level, while Europe’s main stock index opened at a six-week high on Monday and MSCI’s broadest index of Asia-Pacific shares ex-Japan rose to heights not seen since late 2007.
As DB’s Jim Reid summarizes the week’s key events, this week will be dominated by 3 of the most powerful women in the world “and I’m not talking about Daenerys Targaryen, Cersei Lannister and Sansa Stark. Instead we have our real world version with Mrs Yellen likely to announce the end of Fed reinvestment on Wednesday, Mrs Merkel firm favourite with the pollsters to see a big election win on Sunday and Mrs May set to outline her latest Brexit vision in Florence on Friday. Of the three, Mrs May’s speech is currently the least predictable but after a big week for the UK last week (GBPUSD +2.98%, GBPEUR +3.75%, 10yr Gilts +32bps, and the November hike probability from 18.4% to 64.5% according to Bloomberg’s calculator), Sterling assets are seeing some significant volatility at the moment.”
This post was published at Zero Hedge on Sep 18, 2017.
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