What has happened
Equity sentiment soured in the European session as more countries decided to halt the rollout of the AstraZeneca vaccine. After Europe had gone home the US index rebounded and eked out a positive gain for the day, again driven by US Technology stocks.
Vaccine developments
Germany, France, Spain and Italy have all now halted the rollout of the AstraZeneca vaccine ahead of the European Medicines Agency reviewing the data suggesting the vaccine causes blood clots. The EMA is expected to meet on Thursday and agree an EU wide view on the safety of the vaccine. Interestingly, the Heart Research Institute produced a report suggesting 30-70% of those that were admitted to ICU with COVID developed blood clots so the conclusion may be that the vaccine is a far better option than letting a delay to immunisation impact ongoing COVID cases.
Netherlands goes to the polls
Tomorrow the Dutch general election will take place with Mark Rutte expected to retain his place as Prime Minister of the Netherlands. The Dutch PM has seen his position morph, with the exit of the UK, from a small nation supporting a less federalist EU to a leader of the anti-integrationist segment of the bloc. The Netherlands has also seen Amsterdam take an increasingly large share of the European equity market trading from London post Brexit. A key question for the future of Amsterdam as an equity hub will be whether Mark Rutte stays true to his shifting coalition pedigree or tries, as Angela Merkel has arguably done, to use what is expected to be his last term to build a legacy. Whilst trading activity has moved, the next stage to cement Amsterdam’s position would be to lure banking jobs and that requires time and a change in backdrop. The Dutch government took a tougher stance on banking pay in the aftermath of the financial crisis and this would need to be diluted to tempt higher paid finance jobs to relocate.
What does Expat Wealth Adviser think
Markets have become far calmer over the last week with energy and banks receding slightly yesterday despite the more optimistic tone by the end of the US session. The Netherlands election result is largely seen as a done deal but historically Dutch elections have been a bellwether for European sentiment. With the German elections later this year, European sentiment will become increasingly important as we enter the summer.
Index | 1 Day | 1 Week | 1 Month | YTD | |
TR | TR | TR | TR | ||
MSCI AC World GBP | 0.6% | 3.1% | -0.9% | 3.3% | |
MSCI UK All Cap GBP | -0.2% | 0.6% | 0.6% | 5.4% | |
MSCI USA GBP | 0.9% | 3.9% | 0.3% | 3.9% | |
MSCI EMU GBP | 0.0% | 1.9% | 0.2% | 2.7% | |
MSCI AC Asia ex Japan GBP | -0.4% | 1.7% | -6.9% | 2.9% | |
MSCI Japan GBP | 0.8% | 3.1% | -3.3% | 1.3% | |
MSCI Emerging Markets GBP | -0.4% | 2.1% | -6.6% | 2.3% | |
MSCI AC World IT GBP | 1.1% | 4.9% | -5.4% | 0.4% | |
MSCI AC World Healthcare GBP | 0.9% | 2.4% | -4.2% | -2.1% | |
Barclays Sterling Gilts GBP | 0.4% | -0.5% | -2.0% | -6.9% | |
Barclays Sterling Corps GBP | 0.2% | -0.4% | -1.8% | -4.3% | |
WTI Oil GBP | -0.1% | 0.1% | 9.7% | 32.4% | |
Dollar per Sterling | -0.2% | 0.5% | 0.0% | 1.7% | |
Euro per Sterling | 0.1% | -0.1% | 1.7% | 4.2% | |
MSCI PIMFA Income | 0.2% | 1.1% | -0.4% | 1.5% | |
MSCI PIMFA Balanced | 0.3% | 1.4% | -0.3% | 2.1% | |
MSCI PIMFA Growth | 0.3% | 1.9% | -0.3% | 3.0% | |
Source: Bloomberg as at 16/03/2021. TR denotes Net Total Return