Europe
The appearance of common ground being found between Greece and its creditors despite frayed relations between Athens and Berlin helped underpin another rally in European shares on Friday.
Greek Finance Minister Yanis Varoufakis’ middle finger aside, the new Greek government appears more amenable to economic reforms than had been first feared. The EU for its part has shown a willingness to keep Greece afloat until the details of Greece’s proposed reforms are to the liking of bureaucrats.
Another solid rebound in the euro that could potentially harm European exporters was not enough to dissuade bullish sentiment caused by easy monetary policies from the central banks of Europe, the UK and US.
UK
A signal of lower rates for longer from the Bank of England and Federal Reserve have setup a rally in global stock markets and sent the UK’s benchmark stock index the FTSE 100 above 7000 for the first time.
UK markets got the first lift towards the big 7000 level on Wednesday from a less austere and saver-friendly UK budget that offered a few sweeteners for a number of key British industries.
Heavily-weighted energy and mining companies including Fresnillo (LONDON:FRES), Anglo American (LONDON:AAL) and Tullow Oil (LONDON:TLW) led the rally since the softness in the US dollar has caused a surge higher in almost every commodity.
Shares of TSB and Lloyds (LONDON:LLOY) were on the rise after TSB agreed to the takeover over by Spanish bank Banco Sabadell.
Berkley Group share rose after reaffirming earnings guidance.
Markets responded well to Tesco (LONDON:TSCO) buying out ownership from British Land in over twenty of its stores. Investors want to see Tesco committed to turning around its core UK business so the full ownership of stores as well as selling non-core assets like Dunnhumby is moving in the right direction.
Tullow Oil rallied alongside the price of oil, buoyed by a $450 capital raising.
US
After a slight malaise yesterday, US markets picked up where they left off on Wednesday when the Federal Reserve signposted at least another few months of stock-friendly zero interest rates. That’s all that’s been needed to send the S&P 500 back above 2,100 and in the direction of record new highs.
The highest beta stocks were best performers with Janet Yellen’s’ favourite sectors social media and biotech including Facebook and Twitter leading the gains.
Shares of Facebook Inc (NASDAQ:FB) ripped to new all-time highs above $84 on Friday following positive feedback on its new payment feature that could be a major source of new revenue outside of online ads. There has also been talk of possible approval of use inside China which would not be unsurprising since CEO and founder Mark Zuckerberg has been wooing the country for years.
FX
The sell-off in the US Dollar that started in style on Wednesday during the FOMC has set off again with almost every major currency and commodity rallying in dollar terms. The volatility of the past few days has the making of a reversal in the long-standing dollar bull run.
At the very least, sentiment has shifted and put the market one step closer to a top for the dollar and bottom in almost every other currency and commodity.
Commodities
Having closed above $16 on Thursday Silver went on an absolute tear on Friday, up over 4.5% as the dollar sank and investors sought protection from deflation-fearing central banks.
Talk of further easing in China appears to have put a base in copper and the dovish Fed has led to the breakout above its March 2 high at $2.75 / lb.
Crude oil jumped along with the rest of the commodity space with WTI seeing the biggest gains having made new multi-year lows as recently as Tuesday this week.
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