Récap’ de la semaine du 5 février 2018

Monday :

As stocks went free fall, the Dow Jones also plunged by 1,600 points and thus marked its biggest point decline in history over a trading day. The drop amounted to 4.6% and resulted in a financial closing loss of 1,1775 points. Even though the White House released a statement in which the economic strength of the country is highlighted, investors are wary of the return of the inflation, which the economy has been free for nine years.


Yet again, Bitcoin’s stock value has shown its extreme volatility and dropped by 70% to reach a market value of $5,950 in the morning, its lowest point since November 2017. The crypto currency stabilized in the afternoon at $6,250, still far from its historic high of $19,000 back in mid-December.

This day also marks the beginning of a process of more regulations for crypto currency investors in the US, as the US SEC and holds a meeting to set in writing the legal status of those types of currencies to try and manage their fluctuations. This resonates with Mario Draghi’s comments about online currencies “very risky assets” and their prices that are “entirely speculative”.


Amundi, the European leader of asset management has published its results for the year ended 2017 and announced a positive outcome: 131€ billions have been collected over 2016-2017, which exceeds the previous objective of 120€ billions collected. Moreover, the cost to income ratio has reached 52,4%, when the firm was only expecting 46%.

Despite those good results, investors labeled Amundi’s objectives for 2020 (150€ billions collected) “too safe” and it led to a drop of 5.78% of its stock market value (price: 67.440€)


It has been indicated by the Bank of England that the pace of the current interest rate increase will accelerate if the country’s economy remained on its current track. To this day, the rates remain at 0.5%, but it has been decided by bank policymakers that they will need to rise sooner (in May). This decision comes from the will to meet the EU’s economic growth and pace of interest rates, after the full implementation of Brexit. The forecasts show that the UK economy would face a growth of 1.7% and that in order to prevail from an increase of the inflation rate, the monetary policy should be tightened.


The US federal Government shut down for the second time in three weeks, but this time it was very brief.  As the there were only few hours left of funding for the government, the Senate is about to sign a budget bill of $300 millions. The results of the regular-old vote, the government is forced to shut down for 8h45 until President Trump signs the Senate’s bill in order to end the night’s debates.


The future German Minister of Finance, Olaf Scholz (SDP) has stated that he wants to do away with Germany’s usual habits of dictating EU’s budgetary policies. In the coming years, the economic policy will be essentially Germany-oriented: with a budget of 1.400€ billions for the next four years, 46 billions will be allocated to conduct social reforms. The country still plans on participating to the EU’s budget after England’s departure from the union. It used to contribute to 24,3€ billions, and plans to contribute to 30 billions in the future years.


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