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Rally fades as the weekend looms

Despite a downbeat end to the week, investors can look back on a strong run for stock markets.

A man walking, with Canary Wharf in the distance
Source: Bloomberg

One of the busiest weeks in some time is finally drawing to a close. A Greek deal, an Iran agreement, a Bank of Canada rate cut, and broad hints about a UK rate rise (to say nothing of an ECB meeting and fresh comments from Janet Yellen) have kept traders running from one major market move to another.

Stock markets have turned red today, as investors look to trim some positions heading into the weekend; given the magnitude of the bounce in the past week, they can hardly be blamed. The post-deal tidying up continues, as European parliaments proceed with the ratification of last weekend’s agreement, but the big questions about debt sustainability and the future direction of the eurozone’s monetary experiment will take much longer to answer.

The other focus has been on central banks, which have certainly been busy this week. The winners this week have been the pound and the dollar, as their central bankers talk up the probability of rate hikes in coming months.

There is, of course, no sure thing in financial markets, and both Mark Carney and Janet Yellen could easily change their tune if data turns sour. At least the coming weekend will be relatively free of Greek news, allowing investors to prepare for a week that will be chock-full of US earnings reports.

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