Aviso Weekly Market Pulse: August 14th – August 18th

Aug 21, 2023

Market developments

Equities:
Equity markets faced a significant decline as fears of higher rates weakened sentiment, driving key indices toward their largest weekly loss since March. The S&P 500 and MSCI World Index continued to slide, with both U.S. and global benchmarks on track for one of the worst weekly performances since the Silicon Valley Bank incident. The Nasdaq experienced a 2.6% drop, surpassing the decline seen in S&P 500 (-2.1%), as risk assets faced a widespread selloff.

Fixed income:
The Federal Reserve indicating further rate hikes to address inflation boosted Treasury yields this week. Global bonds did rebound on Friday as losses were seen as potentially overdone, with yields on U.S. 10-year Treasuries easing slightly from recent highs and settling at 4.25%. Anticipation looms over the upcoming Jackson Hole gathering, where policymakers may shed light on their stance amid receding recession fears but persistent inflation concerns.

Commodities:
Oil recorded its first weekly loss since June, slipping below $81 a barrel as low trading volumes made the market vulnerable to macroeconomic worries. Despite signs of a tight crude market, including lower U.S. stockpiles, concerns over poor economic data and a housing slowdown in China overshadowed the positive indicators. West Texas Intermediate’s aggregate open interest dropped to its lowest level since January.

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