 Looking through all the financial market news last week, the message was rather unified. That is, 2019 will be a year of slowdown, globally. Economic data, central banks, governments and independent organizations are all reinforcing this message. While ECB's "pre-emptive" dovish turn triggered wild market reactions, it was just the nail for the case. The question now is whether the markets are pessimistic enough on the outlook. Judging from the technical developments, we see that there are conditions in place for bearish reversals in stocks in US, Germany and Japan. But none of these indices confirmed reversal. Instead, late buying on Friday showed much underlying resilience. We believed the panic buttons weren't hit yet. A lot will depend on upcoming developments in US-China trade negotiations and Brexit. In the currency markets, Yen emerged as the biggest winner on risk aversion, and more so from reversal in global treasury yields. US 10-year yield hit as high as 2.759 on March 1 but closed just 2.625 last week, lowest since early January. German 10-year hit hit as high as 0.21, also on March 1, but closed the week at 0.071. New Zealand Dollar was the second strongest, US Dollar the third. On the other hand, Sterling was the weakest ones as crucial Brexit votes approach. Euro followed as second weakest on ECB. |
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