Market developments
Equities: Global stock markets presented a mixed picture. The U.S. market showed strength, with the Nasdaq and S&P 500 Index closing higher this week. European stocks generally rose, with the STOXX 600 supported by defense and financials, and the DAX driven by favourable trade news and optimism surrounding a potential Trump-Putin meeting. Japan had a strong week with the Nikkei posting a +3% gain after a better-than-expected GDP report.
Fixed Income: U.S. treasury yields experienced some volatility, initially slipping before rebounding following a hotter-than-expected Producer Price Index (PPI) report. The PPI data tempered expectations of aggressive Federal Reserve rate cuts, although the probability of a rate cut in September remains ~90%.
Commodities: Energy and precious metals were weak. Gold prices initially tumbled due to clarification that there would be no tariffs on gold bars. The prices then remained rangebound, influenced by expectations of a Fed rate cut and geopolitical tensions ahead of the upcoming Trump-Putin meeting.