Market developments
Equities: Global equity markets broadly declined over the week, with the Nikkei 225 leading losses at ~-4%, followed by the Nasdaq and then the S&P 500 Index. Sentiment was weighed down by a combination of elevated oil prices stoking inflation concerns, volatile bond markets and mid-week disappointment over the Treasury’s debt buyback plan. The Nasdaq was under pressure ahead of Nvidia’s upcoming earnings, though it snapped a five-day losing streak on Friday as US business activity data came in at its fastest pace in more than four years.
Fixed Income: U.S. Treasury markets experienced a burst of volatility before stabilizing by Friday. The 2- year yield rose approximately over the week, while the 10-year edged up to ~4.75%. The 30-year yield, however, fell slightly, as the Treasury Department’s announcement of plans to boost buybacks of longerdated bonds provided some relief at the long end.
Commodities: Commodities were broadly stronger, with gold as the standout performer on the week, supported by continued buying from the People’s Bank of China and a softer dollar. Crude oil also posted solid gains, with Brent and WTI both rising, as geopolitical tensions surrounding Iran dominated sentiment.