On the foreign exchange market, the euro ended the week down 0.12% to about $1.11, while the dollar index displayed no change against a basket of reference currencies.
On the commodities side, oil prices ended higher on Friday in the New York Nymex market, benefiting from the rise in equity markets, although gains were limited by OPEC’s pessimistic forecasts for the months to come. The September contract on US light crude (West Texas Intermediate, WTI) gained 40 cents, or 0.73 percent, to $54.87 a barrel. The October deadline on Brent took 41 cents (+0.7%) to 58.64 dollars.
On the bond market, the yield on 10-year Treasuries picked up 2.6 basis points, around 1.558%, after having reached the day before a low of three years at 1.475%. A low was also recorded Thursday on the performance of ‘Treasuries’ at 30, for the first time below the symbolic 2%. Wednesday’s session was extremely brutal for the New York Stock Exchange – the worst day of the year for the Dow Jones index – fears of recession seized the market following the reversal of the yield curve.
Financial stocks are benefiting from the recovery of sovereign bond yields, with a rise of 2.4% for JP Morgan, while Bank of America is up 3% and Morgan Stanley +2.1%.
Some analysts also link the strength of the markets this Friday to the hope of an increased recovery of central banks. In Europe, Olli Rehn, a member of the Board of Governors of the European Central Bank (ECB), put forward in an interview to the Wall Street Journal, the need for a package of “important and impactful “at the September monetary policy meeting.
In this context, the intervention of Jerome Powell, the boss of the Federal Reserve at the annual meeting of Jackson Hole is eagerly awaited next week (August 23). According to the CME Group’s FedWatch barometer, traders place the probability of a 25 basis point rate cut in the United States at 81.2% next month.
