May 18, 2018
LGT Navigator: Investors eye interest rates, oil, euro, and Italy
Investors continue to focus primarily on yields on the US bond market, as the trend-setting ten-year US government bonds continue to yield over 3% and even more and short-term five-year Treasuries are now trading just below this level. In addition, oil price quotations continue to soar against the backdrop of concerns about a supply shortage due to US sanctions against the important output country Iran. Europe's stock markets were boosted by a weaker euro on the one hand, while the emerging government coalition in Italy of the populist 5-star movement and the extreme right-wing Lega could pose a challenge to the EU. The yield on ten-year Italian government bonds climbed to a three-month high and the Italian bank index fell by more than 2%.
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May 17, 2018
LGT Navigator: Caution in view of rising yields
Equity markets continued to be caught between rising interest rates - the yield on the ten-year US government bond now reached 3.1% - and geopolitical uncertainties at midweek. While US President Trump is insisting on a complete nuclear disarmament of North Korea, Kim Jong Un threatens to cancel the summit in Singapore in June. Against this backdrop, the WTI oil price is trading just below USD 72.
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May 16, 2018
LGT Navigator: Between interest rates and geopolitics
New tensions in the Korean conflict weighed on Asian stock markets after North Korean leader Kim Jong Un threatened to cancel the summit with US President Donald Trump scheduled for June 12 in Singapore. Meanwhile, 10-year Treasuries yield stabilized above 3%.
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May 15, 2018
LGT Beacon: The increased incentive to just sit on the fence
The global economy is doing well, volatility has receded, and the rise in US bond yields has slowed. Simultaneously, even short-term US real rates have turned positive at a time of some extraordinary geopolitical events. For the first time in a decade, investors are being rewarded for sitting on the fence. This weighs on the momentum of the stock market rebound.
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May 15, 2018
LGT Navigator: ECB on course despite weaker economy
Despite weaker economic data and declining inflation, the ECB is aiming for the expected change of course. ECB Governing Council member Francois Villeroy de Galhau, head of the French central bank, considers an earlier than currently generally anticipated increase in the ECB's key interest rate likely. In its official wording, the ECB expects interest rates to rise after the end of its securities purchase program, which will run until at least the end of September. Above all, the inflation trend is decisive, but the ECB believes that the recent fall in inflation is temporary. Euro zone government bonds yields and the euro rose following the comments.
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