Ipek Ozkardeskaya
Swissquote Bank Ltd
A big week of central bank decisions is coming to an end with the central bankers bathing in uncertainty of the tariffs and the economic implications of the rapidly escalating trade war. The US stock markets couldn’t extend the Fed optimism into a second session as FedEx – that’s results are seen as an indicator of economic health – lowered its profit forecast for the third straight quarter. The rapid loss of appetite hints that there is a stronger case for a further selloff in US stocks than a sustainable rebound.
Capital flows toward the European equities were the major theme of the Q1 but flows toward the European equities and the euro could start slowing in Q2 as many investors now consider that most of the upcoming European infrastructure and defence spending is already priced in.
Another leg of the rotation trade is also showing signs of weakness this week. The Hang Seng index was down more than 2% yesterday and shed another 2.40% today on the waning stimulus-backed purchases and the tariff shenanigans.
Appetite loss and rising inflation expectations back oil and gas stocks and TIPS.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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