Market developments
Equities: Global equity markets experienced volatility this week, driven by U.S. economic policy concerns, particularly around trade tariffs and Federal Reserve independence. U.S. stocks rebounded mid-week after a sharp selloff on Monday, with the S&P 500 and Nasdaq gaining as technology shares led the recovery, though investor sentiment remained cautious due to tariff uncertainties. European equity funds saw significant inflows as investors shifted capital away from U.S. markets, while leveraged equity ETFs gained popularity as some bet on a market recovery.
Fixed Income: U.S. bond funds faced selling pressure amid fears of tariff-driven inflation, leading to a fifth consecutive week of outflows, with investors favouring short-term government bond funds for safety. Rising U.S. Treasury yields earlier in the week reflected market unease, though a pause in aggressive tariff rhetoric helped stabilize bond markets slightly. In Europe, bond markets held steady, supported by the European Central Bank’s recent rate cuts, which bolstered fixed-income investor confidence.
Commodities: Oil prices remained relatively stable, with investors monitoring U.S. and China trade developments for potential demand impacts, though no significant disruptions were reported. Bitcoin also surged, reclaiming $90,000, fueled by positive crypto market sentiment and new SEC leadership. Other commodities like industrial metals faced muted demand due to global growth concerns.