FINANCIAL MARKETS WEEKLY - Financial markets continued to rise modestly

    • Financial markets weekly

Over the past week, financial markets continued to rise modestly, both stocks and bonds and commodities. The broadest global stock index MSCI All Country World recorded a gain of 0.7%. We were again pleased with the emerging markets. MSCI Emerging Markets index recorded a gain of 1.5% and thus surpassed MSCI World index of developed markets which recorded a gain of only 0.6%. To our great satisfaction, the performance of Central European equities was again above average, as CECEEUR index recorded a gain of 1.9%. Overall, however, global stock markets as a whole remain overvalued as our global valuation Z-Score reaches 2.4, which is still close to the all-time high. The average global equity valuation is thus approximately 2.4 standard deviations above the historical average, which is truly unprecedented.

FINANCIAL MARKETS WEEKLY - Financial markets continued to rise modestly

The broadest global bond index, Bloomberg Barclays Global Aggregate Bond, recorded a very modest gain of 0.1%, while the average global bond yield to maturity remained at 1.12%. However, in real inflation-adjusted terms, the average global bond yield to maturity remains deeply negative, currently at -2.5%. Performance of corporate bond indices was also very slightly positive.

Commodities also performed well. S&P GSCI global commodity index recorded a gain of 2.8%. The price of a barrel of the North Sea Brent rose 3.2% to $ 72. Gold weakened by 0.7% to $ 1,890 per troy ounce.

Dollar was again very stable over the last week. DXY dollar index, which measures the dollar's performance against a basket of other major currencies, strengthened slightly by 0.1% during the last week. Against the euro, dollar strengthened slightly by 0.2% to 1.217 USD/EUR. Dollar also strengthened against koruna by 0.2% to 21.00 CZK/USD. Koruna did not change its value against euro and remained at the level of 25.45 CZK/EUR.

Michal Stupavský
Investment Strategist at Conseq Investment Management, a.s.


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