Market developments
Equities: The Stoxx Europe 600 ended the week flat despite a volatile stretch that saw the index swing from 604 to 626 points, representing a larger high-low range than almost 80% of weekly swings over the past five years. In contrast, US markets showed resilience, with technology leading gains as the S&P 500 climbed and the Nasdaq jumped, both hitting record highs. The rally was supported by strong labour market data showing 115,000 jobs added in April, reinforcing the view that the economy remains resilient despite the energy shock triggered by the Iran war.
Fixed Income: Fixed income markets saw modest gains this week as mixed economic data cemented expectations that the Federal Reserve would maintain steady monetary policy. The jump in Canada’s unemployment rate to 6.9% from 6.7% in April dampened Bank of Canada rate-hike expectations, with fixedincome traders expecting at least one rate cut this year. U.K. gilts outperformed as Prime Minister Starmer vowed to stay on despite election setbacks.
Commodities: Commodity markets were dominated by geopolitical developments in the Middle East, with oil prices stabilizing despite fresh clashes between the US and Iran. Gold rose during the week, trading near $4,725 an ounce, as signs of buying interest emerged despite the fresh Middle East clashes.