EUR 105.56 For Business Accounts Only

DBD Strategy Daily - INDICES : should you trust Trump?

Trump tweets can be surprising sometimes, but the recent ones are only too obvious ahead of mid-terms. Is it a real truce? If it is, and if yields rise further (truce means would mean no economic slow-down), will equities sustain higher financing costs? Will the euro rise again (and choke the all-too-weak European economy) on the back a this risk-on adjustment and in spite of ever-widening Atlantic spreads? Those questions are much too hard to answer. They are all inter-connected. Our point of view is that the only thing that matters is to assess whether investors are still willing to buy more equities because they have enough cash AND they are confident enough in the future. As commented earlier, sentiment is not typical of the end of a bearish trend. Reading sentiment is always hard, we therefore ultimately rely on stop-losses to make decisions. For the time being, the bounce is within the acceptable boundaries that we set on Monday and Tuesday. There is material to doubt, but prices do not tell us yet to change our opinion.