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What are European markets pointing out?

Pasquale Galassi

The Shanghai Composite index +2.66% jumped 2.7% to 2,317.37 and Hong Kong’s Hang Seng Index  climbed 1%, as investors snapped up beaten-down banks and property developers in both markets.

While I'm writing the broader Stoxx50 rose 0.75% to 2691.89, the German Dax traded up 0.60% to 7995.45, in the bond space the German Bund futures traded 0.17% lower to 144.38. In US the S&P globlex rose 0.34% to 1547.25,  while the Nasdaq gained 0.56% to 2794.75.

What are all these data pointing out ?

  • Markets just want to go higher
  • It looks like a "ringfenced" Cypriot problem
  • Markets are under-estimating the "Cyprus effect" on banking depositors trust in Europe
  • Russia is perceived as the lender of last resort for the Cypriot banking system and therefore the crisis is "perceived" as over

Whatever your idea is, you need to consider that up to know money have been put to work into European markets, as highlighted by the common currency, which is trading 0.33% higher versus the greenback to 1.2924$.

But....there is one factor we are not taking into consideration: the social unrest that is spreading from Europe to Asia.

Can "the social unrest" become the next market driver?