Markets In-Review: Negative Sentiment Governs Markets

? Recent weeks’ negative sentiment continues to prevail in equity markets

? Dovish Fed, ECB minutes provide some limited support

? S&P500 down 1.2% for the week

? U.S. sovereign bond yields fall to lowest since early Feb amid flight to safety

? USD/JPY retreats 3.2% weekly to 108.07

? Oil prices rise ahead of Doha meeting

Global markets continued to trade amid fairly negative sentiment this week. The S&P 500 kicked off the session with a 0.32 decrease on Monday, followed by another 1% loss the following day. Somewhat unsurprisingly, it was again monetary policy and due accommodation thereof to provide some support for the market. On Wednesday, the Fed released the minutes from the March Federal Open Market Committee. Moderating expectations ahead of the upcoming April 27th meeting, the minutes revealed that according to several FOMC members, a rate hike in April “would signal a sense of urgency they did not think appropriate.” The substantial hardships faced by the global economy were also mentioned extensively, while thoroughly addressing the effect this is likely to have on the U.S. economy. The release of the minutes themselves saw a downtick in the markets, but they were quick to recover afterwards, with the S&P500 ending the day at over a 1% gain.

Some backwind was later provided by the ECB, on Thursday, with the release of the accounts of its March meeting. These revealed broad support expressed for the decision made at the time to lower all the ECB’s key policy interest rates. Additional cuts were also put one the table, with “different views” said to be expressed “about the costs and benefits of moving further into negative territory.” In spite of the ECB’s good intentions, however, this wasn’t enough to offset markets with the DAX registering a 1% decline during the day, summing to -1.8% during the week. In the U.S., the S&P500 lost 1.2% on that Thursday. Friday’s session, however, was considerably stronger for the S&P with a 0.3% gain amid the increase in global oil prices. Needless to say, however, that this didn’t prevent the leading U.S. index from concluding the week at a 1.2% loss.