Monday
May 13		 Weekly market update
intro Financial markets have experienced a turbulent week, with a very sharp return of volatility, against a backdrop of uncertainty regarding trade negotiations between China and the United States. D. Trump has overtaxed imported Chinese products by 10% to 25%, effective since Friday, and China has since retaliated, but talks are still ongoing between the two parties, demonstrating a willingness to reach an agreement.
Indexes

Over the past week, all geographical areas have lost ground, due to large profit taking.
In Asia, the Nikkei lost 4.1%, the Hang Seng 4.9% and the Shanghai Composite 4.5% (despite a jump of 3.1% on Friday).

In Europe, the CAC40 recorded its worst weekly performance since the end of December, with -4.2%, returning to a significant support zone, as shown in the graph below. The Dax lost 3.1% and the Footsie 1.9%, with the blur surrounding the Brexit. For the peripheral countries of the euro zone, Portugal lost 3.7%, Spain 3.1% and Italy 4%.

In the United States, on Friday, the Dow Jones lost 3.9%, the S&P500 4.1% and the Nasdaq 5.2%.

The French index returns to the contact of a hinge zone

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Commodities

Caught between the resurgence of geopolitical risks from Iran and the latest developments in the Sino-American negotiations, oil prices have stagnated this week. As such, the Brent barrel hovers around USD 70 while the WTI is trading around USD 61.

Gold and silver follow different paths. While gold metal remains supported by renewed volatility on the equity markets, silver remains under pressure like the rest of the sub-fund (palladium, platinum). Gold thus rose to USD 1285 while silver continued to lose ground at USD 14.78 per ounce.

It is impossible not to talk about the effects of Trump's announcements to explain the harsh course of base metals on this weekly sequence. While copper limits breakage by giving up only 1.1% to USD 6112, nickel and zinc fall more heavily by giving up 3.7% and 4.9% respectively to 11710 and USD 2725.
Equities markets

Cellnex: Europe's leading mobile infrastructure giant at the highest level ever

The Catalan group, listed on the Ibex, unveils its ambitions. The company, owned by the Benetton family, with a 29.9% stake, is becoming a major operator in wireless telecommunications infrastructure in Europe. In addition to Spain, Cellnex has offices in Italy, the United Kingdom, the Netherlands, Switzerland and France.

The company went public in April 2015, the same month it decided to change its name from Abertis to Cellnex. It is stepping up its acquisitions of pylons in all these countries, including recently in France, with the sale by Iliad of 11,000 towers, as well as in Switzerland, by acquiring 2,800 antennas in Salt.

Despite tight profitability and solvency ratios, the stock market performance is qualitative. The title reaps, indeed, more than 30% over 2019, which increases its valuation to 8.3 billion for a projected turnover of 965 million euros in 2018.


Cellnex Telecom's ascension path

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Bond market

The sovereign bond market is stabilizing with rates close to their lowest level. In the United States, the 10-year rate of return was 2.44%, a downward trend encouraged by arbitrages from stocks that fell during the week. The same applies to Europe, where the Bund is back below the symbolic zero and the French OAT is trading at 0.33%. In a new phase of negotiations, the United Kingdom is seeing its debt weigh less and less, with a rate at the lowest of three months at 1.11%.

Italy, which is seeing its GDP growth return to positive territory, keeps a reference to 2.66% while for Spain, it falls to 0.97%. On the other hand, Greek public debt (3.5%) is under pressure from investors. Indeed, Tsipras has just asked for the confidence of Parliament in the run-up to the European elections.
Forex market

The British currency fell against most of the major currencies despite the Bank of England's comments to open the door to monetary tightening. The British pound is trading against the Swiss franc at CHF 1.32 and at USD 1.30 against the greenback. The EUR/GBP exchange rate also benefited at GBP 0.862, i.e. +150 basis points.

The Chinese currency is under attack from foreign exchange traders following the trade dispute and is therefore losing ground over the week against the euro (RMB 7.66 against RMB 7.52) and against the dollar (RMB 6.84 against RMB 6.72).

At the same time, it should be noted that the single currency has risen sharply against the currencies of Northern Europe (SEK and NOK) or against the Turkish lira (TRY 6.90 against TRY 6.50). Unlike these variations affecting minor currencies, the EUR/USD exchange rate stabilizes above USD 1.12, even if the trend remains significantly downward for the euro.

In Asia, the sharp rise in buyer interest in the yen is partly explained by its role as a safe haven in more stressed markets, with the Japanese currency recovering 200 basis points against the dollar to JPY 109.8.

For once, it is worth highlighting the recent course of the Bitcoin, which has been growing strongly in recent weeks (>USD 6200). Speculative interests are again manifested at the time of purchase.

Evolution of Bitcoin

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As it progresses, Bitcoin will encounter a number of graphic obstacles
Economic data

The rebound in the Sentix index (investor confidence) came as a pleasant surprise last week, rising from -0.3 to +5.3, as did service activity, which did slightly better than expected (52.8 versus 52.5). In addition, retail sales remained stable while analysts were expecting a 0.1% decline. On the negative side, the European Commission has once again lowered its growth prospects to 1.2% in the euro zone in 2019 and 1.5% in 2020.

This week, we will look at the ZEW index of German economic sentiment, industrial production, the second version of quarterly GDP, the trade balance and the latest estimate of the consumer price index. The Eurogroup will meet on Thursday and the Economic and Financial Affairs Council on Friday to close the week.

In the United States, the number of job offers reached 7.5 million in March (compared to 7.1 million in February) according to the JOLTS report. The trade deficit turned out to be less than expected at $50 billion (consensus -51.4 billion). The producer price index fell in April from 0.6% to 0.2%, as did the consumer price index, which fell by 0.1 percentage point to 0.3%. Oil inventories fell by 4 million barrels (consensus +1.1M) and unemployment registrations were disappointing.

Retail sales, the New York Fed Manufacturing Index, capacity utilization rates and industrial production will be released this week. Then, the building permits, the PhillyFed index and the Michigan index will close the weekly sequence. As every week, crude oil inventories and jobless claims will also be published.
Vigilance replaces euphoria

After four months of linear progression without volatility, the past week is characterized as a break in the index paths. The graphical declines since their annual peak are more or less marked depending on the continent. It is not surprising to see the Chinese market (-10%) more affected than Europe (-4.5%) or American equities (down 4%). The consolidation phase on the various indices is defined as a secondary movement part of a fundamental upward trend. No more quarterly publications, no more international trade negotiations, and they should last a few more weeks.
In such a scenario, pressure will once again be put on equities and investors will try to decipher American and Chinese intentions in order to find relevant entry points, synonymous with real opportunities.