Trading room at Zurich Life Investments Ireland

Trading room at Zurich Life Investments Ireland

Markets successful sidestep

A turbulent week in politics failed to sway the markets and the aftermath of the UK elections was limited to a loss of 0.3% on the S&P 500 and FTSE 100, writes Ian Slattery.

The stock market managed to successfully sidestep multiple macro events last week, including Theresa May losing out on a majority vote and former FBI Director James Comey's testimony. The damage was limited to a loss of 0.3% on the S&P 500 and FTSE 100 respectively.

The European Central Bank met on Thursday to decide on its monetary policy, with ECB president Mario Draghi announcing interest rates were to remain unchanged for an "extended period of time". The decision to hold the rate at 0.0% will come as no great surprise but he did add that the ECB will extend its Quantitative Easing (QE) program if needed.

Oil prices suffered another poor week amid on-going disputes between Qatar and some of its neighbours. Oil dropped 3.8% over the course of last week.

Zurich Global Markets Index

The global index managed to stay afloat with a gain of 0.2% last week, despite the FTSE 100 and S&P 500 losing ground. Gold slipped this week by 1% but still remains positive with nearly 10% for the year to date.

Silver had a similar week dropping 2% but still remains at 8% for the year so far. As mentioned previously oil had another bad week and has a negative return of over 14% for the year.

The price of the US 10-year bond fell as yields rose to 2.20% from 2.16% a week previous. The equivalent German yield also fell to 0.26% from 0.27% last week.

The week ahead

Wednesday 14th June: The FOMC will announce on Wednesday whether it will be increasing rates for the second time this year. It is widely expected that the Fed will raise its rate by 0.25% but may reveal its plans to reduce its balance sheet.

Thursday 15th June: On Thursday the Bank of England will meet to make a decision on its own monetary policy. After last week's surprise election result it's believed the BOE will look for stability and keep rates unchanged.

Friday 16th June: The Bank of Japan will also meet on Friday where they are expected to keep a similar stance to the ECB and keep rates unchanged for the time being but deliver a positive outlook for the economy.

About: Zurich Investments

The team at Zurich Investments is a long established and highly experienced team of investment managers who manage approximately €21.6bn in investments of which pension assets amount to €9.6bn. Find out more about Zurich Life's funds and investments here.

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