The first week though wasn’t complete, ended with the growth of the key European fund indices. Note that the dollar has become weaker in the majority of the pairs, which of course influenced the European indices. At the time the European session opened, the seller activity was very low.

Last week leaders and outsiders:

DAX:

Top: HeidelbergCement AG +1.54%, Allianz SE +1.46%, Sartorius AG Vz +1.43%

Flop: Henkel AG & Co. KGaA Vz -2.21%, Fresenius Medical Care AG & Co. KGaA St -1.47%, Deutsche Telekom AG -1.22%

EURO STOXX 50:

Top: PROSUS NV +3.05%, Inditex +2.85%, ENI S.p.A. +2.43%

Flop: Danone -2.18%, Sanofi-Aventis S.A. -1.17%, Deutsche Telekom AG -1.08%

As you can see the Friday’s volatility was very different with the two indices. E.g., the DAX leader grew only 1.54%, while the EURO STOXX 50 leader has gained more than 3%.

At the same time, the current week may turn out less volatile. One should pay extra attention to the upcoming CPI report publication in the US. The further inflation reduction in the US shall soften the greenback and consequently influence the European indices.

Bond market:

Looking at the bond market, pay your attention at the moderate growth in the Germany, France and some other countries’ 10-year yield profitability. This growth fully represents the current fund market situation and the euro’s strengthening. Nevertheless, with the European session opening, we do no observe any further 10-year yield profitability growth. Thus there’s still a chance the moods would change.

The oil market

Going further to the oil market, let’s consider a delayed reaction. If a splash of trading activity on the currency and bond markets happened at the start of the Asian session, the oil demand has increased only when the European session opened.

Nevertheless, the growth driver for this market is the prospect of demand regeneration in China. This would happen in case the quarantine measures are softened and the borders are opened for the new coming tourists. But here we do not speak about the trend change, rather than correctional growth. The world’s economy remains extremely unstable, which increases the chances of a decline in oil demand with the elevated key rates on the background.

Considering the above, there’s a chance the moods would change and consequently the descending direction would renew.