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Monthly Review - May 2021

13 days ago

QUICK LOOK
The Markets

0.5%

S&P 500

1.6%

EURO STOXX 50

0.8%

FTSE 100

2.8%

CAC 40

1.9%

DAX 30

1.1%

BEL 20

4.3%

FTSE MIB

3.8%

IBEX 35

1.3%

TOPIX
   
 Source: Bloomberg 31.05.2021

Fed talks tapering

Or just started to talk about talking about tapering (that is reducing) its massive monthly bond buying programme, in place since the pandemic began. The minutes of the US Federal Reserve’s latest meeting showed some members proposed a plan for broaching the subject with the markets. And that could be as early as the end of this year. After the legendary ‘Taper Tantrum’ of 2013, when the Fed proposed a swift withdrawal of support, and the bond market turbulence in February when a tapering bias was suspected, a cautious approach would seem advisable.

Crypto volte face

Having delighted the so-called ‘crypto bros’ earlier in the year, by suggesting Tesla would accept bitcoin in payment for its cars, Elon Musk abruptly turned his back on the digital currency. The reason given was the environmental impact of bitcoin mining, particularly in countries where coal is still a major source of energy. Recent tweets from Musk seem to favour the lesser known Dogecoin. China then warned of a crackdown on the use of cryptocurrencies as payment. Fears of ‘crypto-contagion’ caused rising volatility in other financial markets.

Carbon copy

As prices touched new highs on the EU Emissions System, Brexit forced the UK to launch its own carbon credit market. Prices opened at a significant premium to those across the Channel, meaning higher costs for the UK’s big polluters. And bigger profits for companies with strong green credentials, who can sell on their carbon credits. Meanwhile Stellantis, the car giant formed by the merger of Chrysler, Fiat and Peugeot, announced it would no longer need to buy carbon credits from Tesla, given the carbon credits earned from their own focus on electric vehicles.


Your latest insights

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Article | Podcasts | 14/06/2021

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Archinomics Weekly - Monday 7th June 2021

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US equity markets crept higher, boosted by strong macro data and led by the energy sector. European markets also advanced, although were held in check by inflationary fears. 

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Article | Podcasts | 07/06/2021

US employment numbers were the focus of financial markets, falling short of consensus forecasts, while agricultural commodity prices soared. This week is forecast to bring a further jump in US headline CPI numbers to 4.7%, as well as the monthly meeting of the European Central Bank.

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