Central banks send mixed signals to financial markets
Last Update: 25/12/2024
The past week was characterised by many central bank decisions. The RBA, BoE and FED decided on further interest rate hikes, but sending mixed signals and reviving the assumption that the restrictive monetary policy cycle is in its final chapters. Towards the end of the week, US labour market data (better than expected in terms of employment but with unemployment on the rise) gave further impetus to stock markets, where, however, technology continued to suffer.
In the past week, 54 per cent of the instruments and indices used for our analysis recorded a positive change. 45% experienced a negative change.
Analysing by macroclass, 59% of the equity instruments and indices recorded a positive weekly variation. 5% of the bond instruments and 78% of the other asset classes used for our analysis. These numbers summarise the mixed feelings of investors over the course of the week. Often more moderate words from central banks buoyed hopes in equities, while the effect of bullishness was felt in bond prices.
Improving valuations in the past week accounted for 41% of the total. The previous week, valuations that had been adjusted upwards were 54% of the total.
Among the equity analyses, improving valuations accounted for 47% of the total.
Among the analyses for bonds, 12 per cent of the total were upgraded valuations.
Among analyses relating to other asset classes, improving valuations accounted for 47% of the total. Other asset classes included commodities and currencies.
Of the valuations, 54 per cent were above the short-term average. Of the valuations, 45% were above the long-term average. Last week they were 62% and 46% respectively.
