Market developments
Equities: U.S. equities experienced a notable rise this week, reflecting growing investor optimism regarding interest rates and the upcoming inauguration of Donald Trump. Strong fourth quarter earnings from major US banks have further bolstered confidence in the market. This positive trend was highlighted by significant gains in financial sector stocks.
Fixed income: The year began with volatility as concerns about persistent inflation led to fears that the Federal Reserve would hesitate to lower interest rates. However, market sentiment has improved with recent data showing cooler than expected inflation and supportive comments from Fed officials. Bond prices closed higher this week as the macro data drove yields down.
Commodities: Oil traded slightly lower on Friday, yet it experienced a fourth consecutive week of gains due to the impact of broader sanctions against Russia’s energy sector which have tightened global supply. There remains uncertainty surrounding President-elect Donald Trump’s energy policy as he prepares for his inauguration on Monday. Market participants are closely watching how his administration will approach energy regulations and international relations.