MAKE HEDGES WHILE THE SUN SHINES

Edito With the main risks having been avoided, or instead put off (trade war, excessive deficit procedure against Italy), optimism is back: 5 to 6 days of consecutive spikes in the main stock indexes, a VIX which has fallen to 13%, a BTP -Bund at 205bp. All this is, of course, based on the reassuring presence of the central banks. Expectations are high and continue to drive the bull bond market (the 10 year Bund was at -0.40% this week!). Starting Tuesday, the Fed’s Minutes and Powell’s speech will be closely studied. In the short term, hopes will continue to be supported. However, the first time there is any disappointment, the markets will again focus on the macro news flow, which is not very encouraging.