European indices continued to climb on Friday, heading towards their best weekly performance in a month, as market sentiment strengthens.
Poor CPI and PPI data from China didn’t scare investors significantly as they kept on driving benchmarks higher with a specific focus on miners due to climbing metal prices.
The bullish correction continues following the post-Jackson Hole sell-off registered in late August, as investors have now widely accepted the current lower liquidity environment sparked by tighter monetary policies. However, even if the hawkish switch from the ECB and the Fed are now seen as almost fully priced in, the risk-on sentiment remains fragile and under the threat of other major lingering concerns such as a slowing Chinese Economy, the energy crisis in Europe as well as continuing geopolitical issues.
In addition, even if investors cheered the way central banks are working towards a “soft-landing” for economies, macro data in both the US and the Eurozone aren’t particularly reassuring.