Markets In-Review – Markets Gain As European Risks Dissolve

■ Indications of compromise with SYRIZA and Russia boost European and global markets

■ DAX adds 1.1% during week, CAC 40 up 1.5%, IBEX 35 up 1.6%

■ S&P500 adds 2%, sets new all-time record high

■ Nasdaq gains 3.15% during week, to 15 year high

■ Oil prices continue advancing; add USD 1.1 per bbl

Last week's session has been kind with market participants. European indices concluded on the upside, with the DAX adding 1.1%, the CAC 40 up 1.5% and the IBEX 35 recording a 1.6% weekly gain. U.S. markets had an even better one, as the S&P 500 is now 2% higher than it were a week ago, and more impressively, marked a new all-time high for the index on Friday's session. Similarly, and the Nasdaq gained no less than 3.15%, setting a new record high, since that of the .com bubble, 15 years ago. Weekly performance on Asian markets range from "somewhere in between" with the Nikkei 225 increasing by 2.3% to the Hang Seng recording nearly no weekly change.

Most of the European equity indices opened Monday's session well within negative territory. The European pessimism owed, in large, to Greek Prime Minister and Leader of the Coalition of the Radical Left (SYRIZA), who vowed in his Sunday speech to increase the minimum wage, restore the income tax-free threshold and postpone privatization in Greece. The Athens stock exchange lost 4.75% on Monday, and the DAX hovered around 1.6% lower at the start of Monday's session, vs. compared to previous week's close.

Markets in Europe started picking up on Tuesday amid rumors that a compromise may be reached between Greece and other members of the E.U, unsurprisingly, these rumors later proved to be rather backed as Greek Finance Minister, and SYRIZA member, Yanis Varoufakis, commented that the government seeks to maintain the existing bailout agreement and withhold the budget from derailing. The Athens stock exchange recovered well beyond the losses of the previous day, surging 7.8%. The DAX was up 0.85%, and even the S&P500 opened approx. 0.5% higher than the previous day's close.  

Economic peace for our time

The mood further improved, Wednesday, on news that Russia concluded a deal with Germany, France and the Ukraine, for a cease fire in eastern Ukraine. Global markets gained significant momentum on Thursday, after world leaders released statements from Minsk talks. Though the agreement was followed by Ukrainian allegations of more Russian military units rushing in the country, it didn't seem to depress markets' appetite for good news. The day saw oil prices gain 4.85%, no less, recovering from the previous two days' loss, which totaled -7.6%.

Currency markets have had somewhat of a difficult time pricing in the news on Greece. Specifically, it was unclear whether a Greek departure from the Eurozone would do good to the Euro, as it would bring about stability and enable the ECB to adopt more hawkish policy somewhere along the line, or rather whether a 'Grexit' will be followed by the departure of other Eurozone members, posing greater risk for the currency. This translated to somewhat turbulent trading of EURUSD, through most of the week, without the pair concluding on any specific direction between Monday and Wednesday, but rather hovering at around 1.13. News of the ceasefire in Ukraine, on the other hand, had greatly benefitted the Euro, seeing the pair add 0.6% on Thursday, and conclude with a 0.7% weekly appreciation of the Euro vs. the U.S. Dollar. A modest 0.4% appreciation of the EUR vs. the JPY was also seen during the week.