Aviso Weekly Market Pulse: May 9th-13th

May 16, 2022

Market developments

Equities:
U.S. markets fell for a sixth consecutive week, with the S&P 500 Index down nearly 5% prior to the partial relief rally on Friday. The U.S. consumer price index, although declining on a year-over-year basis, came in stronger than expected and continued to indicate strong upward price pressures. U.S. Federal Reserve speakers this week indicated the central bank would stay on an aggressive hiking path to counter stubbornly high inflation. Uncertainty in China amid the lockdowns also weighed on investor sentiment.

Fixed income:
Yields declined for the week amid the risk-off sentiment, even as the Fed and the European Central Bank remain on their tightening paths. The Fed indicated multiple 50 basis point hikes to come, and the ECB said hikes could start as early as July and sees the possibility of rates above zero by the end of the year.

Commodities:
Copper prices slumped further on global demand fears amid a weaker economic backdrop. Gold prices also declined as policy tightening remains well on track and the U.S. dollar strengthening added to pressures.

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