Investor relations blog

What a week!

What a week! A tense G7 summit, a historic meeting between Donald Trump and Kim Jong Un, three major central banks meetings, a trade war between the US and China… Last week was full of potentially market-moving events. Not to mention the launch of the World Cup! Yes, surprisingly football tournaments do impact financial markets, and not in a small way. According to a study published by two European Central Bank economists, during the 2010 World Cup, stock market volumes were as much as 55% lower when the national team was playing!

It is too early to know what impact this World Cup will have on the markets but both the chaotic G7 summit and the “new future” announced in a joint statement by the US and North Korea left the investors relatively unmoved while most of the market’s attention focused this week on the central banks meetings.

As expected, the FED raised its target interest rate on Wednesday and signalling two additional increases for 2018. The following day, the ECB decided to leave interest rates unchanged signalling that no increase is expected before September 2019. As a consequence, bond yields went down, the euro fell sharply, suffering its biggest daily loss this year, while most of the European equities enjoyed a strong boost, the Stoxx 600 gaining 1.23% on the day. But low interest rates are not necessarily perceived so positively in the financial sectors and both the Stoxx 600 Bank and the Stoxx 600 Insurance reacted poorly to the news, declining 1.9% and 1.6% respectively on Friday, in a market already unsettled by trade tensions. The Ageas share was no exception losing 1.7% on the day, erasing the gains of the previous days and closing the week down 0.5%.