Certainly, the meeting of the ECB Governing Council was in the spotlight last week. The market consensus assumed that the bank would extend QE at 80 billion euros for another six months. In the meantime, the bond purchase program was extended for nine months, whereas its scope was cut to 60 billion euros per month. A reaction of the foreign exchange market was quite nervous. Originally, the decision was interpreted as the beginning of the QE limitation, whereas in fact, it turned out to be more dovish than expected. Over the next nine months the bank will supply a market with the amount of 540 billion euros – it will be more than 480 billion euros in six months.

Weekly comment MM Prime TFI  - December 12, 2016

Weekly comment M In the market’s opinion, a December interest rates raise by the FOMC is certain. In fact, this attitude is not unfounded – the latest macroeconomic data from the US once again confirmed the strength of the American economy. The readings of the annualized GDP growth (3.2%), the Chicago PMI (57.6 pts.) and the manufacturing PMI (54.1 pts.) turned out to be significantly higher than expected. What is more, data from the American labor market did not fail as well. The non-farm payrolls stood at 178K vs 175K projected and the unemployment rate amounted to 4.6% vs 4.9% expected. M Prime TFI  - December 5, 2016

Despite the facts that the American stock exchanges were closed on Thursday (Thanksgiving Day) and they were open shorter on Friday (Black Friday), their major indices ended last week in the green color – the DJI and the NASDAQ rose by 1.5% and the S&P500 increased by 1.4%. What is more, all of them reached their historical peaks. In Europe, the market sentiment was rather bullish as well. During the whole week, French CAC40 went up by 1%, German DAX soared by 0.3%, whereas British FTSE250 fell by 0.3%. Investors focused on the latest macroeconomic data readings, especially from the US. The dynamic of the durable goods orders stood at 4.8% m/m vs 1.5% expected.

Emotions related to the American elections subsided clearly. Nevertheless, most of major global stock indices ended last week in positive territory. In the US, the NASDAQ rose by 1.6%, the S&P500 soared by 0.8% and the DJI increased by 0.1%. In Europe, British FTSE250 took off by 1.2%, French CAC40 went up by 0.3% and German DAX fell by 0.03%. There were a lot of significant movements in the bond markets and the foreign exchange market. An increase in risk aversion contributed to the sell – off of the treasury bonds on the global market. In addition, during the speech in the American Congress Janet Yellen reiterated that the decision concerning the interest rates raise should be made in the near future.