Market developments
Equities:
U.S. equities rallied on Friday and extended the weekly gains to over 3% for both the S&P 500 and Nasdaq as key inflation measures showed signs of cooling, signalling that the Fed may be close to ending it’s tightening cycle. Ending the month of March in the green for the U.S. is meaningful given the banking crisis we faced only a few weeks ago. The Nasdaq closed out it’s best quarter since 2020, up over 16%, while the S&P 500 and TSX were up over 7% and 3.5% respectively.
Fixed income:
Treasury yields in the U.S. fell on Friday, ending a quarter of volatility and erratic swings. Traders are still trying to weigh the impact of the banking collapse and the economic data to determine where the Fed should pause their rate hikes. The U.S 10yr yield bounced off the 3.4% level and closed just below 3.5%, the 2yr yield closed back above 4%, and the Canadian 10yr closed up 16bps to 2.9%.
Commodities:
Oil settled at its highest level in nearly three weeks as it closed about $75 and up 9% for the week as concerns over the U.S. and Euro banking crisis eased. However, it finished the month lower for the fifth consecutive time as concerns over a potential recession and a decline in demand pressured the commodity.