Financial markets have experienced a very tensed week, due to US inflation statistics suggesting that the Fed will tighten its monetary policy more quickly than expected.
However, the US central bank tried to reassure investors, mentioning temporary pressure on prices, and its willingness to maintain monetary support in the coming months.
Indexes:
Over last week in Asia, the Nikkei posted a weekly loss of 4.3%. The Hang Seng lost 2% while the Shanghai Composite gained 2.1%.
In Europe, the CAC40 was down 0.3%, as was the DAX. The FTSE 100 fell 1.4%. Concerning the peripheral countries of the euro zone, Spain was up 0.5%, Portugal 0.7% and Italy 0.3%.
In the United States, the Dow Jones lost 1.4%, the S&P500 1.7% and the NASDAQ 100 3%, preserving a long-term trend.
Commodities:
The cyber attack that temporarily paralyzed the Colonial Pipeline in the United States dominated the news in oil markets. This event naturally exerted upward pressure on fuel, but downward pressure on the price of crude oil (via a drop in US refinery activity).
At the same time, OPEC said it was more optimistic about the state of demand in the second half of the year, which gave oil prices a bit of a lift at the end of the week. Brent crude is trading around 68 USD per barrel, compared to 64.5 for WTI.
Despite a rise in bond yields, gold ended the week at a high of around USD 1840. In fact, investors could be very interested in the barbarian relic in case inflation rises faster than nominal rates, thus preventing any pressure on real rates.
In the industrial metals sector, it is time to take a breather. Copper is losing ground.
Equity markets:
This week, let's have a look at the best performance on the ASX since the beginning of the year. Galaxy Resources (OTC:GALXF) is an Australian mining company specializing in mineral exploration and lithium production. The company is up 70% since Jan. 1. A development that is due to the rise in raw materials for several weeks already. However, this increase is due in large part to the explosion in demand for the white metal, thanks to the boom in sales of electric cars.
Late April, to meet this growing demand, Galaxy Resources and Orocobre (OTC:OROCF) agreed to merge and increase their strength in the field. Both have a strong presence in Latin America.
Analysts see future synergies and predict increased revenues and a positive and growing net profit for the years to come.