While the last quarter has been a trial for European markets, the future may be bright. This Monday, the European stock index, STOXX 600, has shown marginal improvements, up 0.20%. Generally, the stocks and euro remained stable, alongside bonds. In other news, attempts to prevent a US government shutdown seem to have succeeded, which has saved their futures market somewhat.
Traders are now hopeful that the EU market can recover from its recent downturn. Even the best European stocks have been suffering recently in the current climate. Over the course of the last quarter, there was a 2.50% decline. Oil prices rose, as did the cost of lending worldwide. European bonds were producing higher yields this time. Germany, for example, had their 10-year bonds at an almost record high. It had neared 2.68%, close to the highest point in 12 years. We will have to see what happens in terms of long term investment stocks.
Additionally, PMI data coming out this September further strengthened pessimistic sentiment. It sent the euro into another decline the day after. However, we should note that this happened to many major currencies due to strong US dollar data.
Political Reprieve in The US and Its Impact on The Stocks
In the US, sudden political recoveries help boost the economy. The government managed to avert a shutdown that people had been anticipating. This then aided in buoying futures, as they lifted by 0.50% within European markets. A stopgap funding bill allowed the government to delay any shutdowns until mid-November. So, data on the state of the US economy can still all come out at the originally planned time.
However, this is only a delay in a shutdown. Most seem to expect that it will eventually come.
Meanwhile, in Asia, Tokyo’s Nikkei index has already indicated growth in the stocks in Japan, going up 1.70%. While the yen might have suffered, this might have actually helped the Japanese economy. Exporters there thrived off of the change.
