Weekly Market Overview– Equities fall on rising US yields
Weekly Market Overview– Equities fall on rising US yields
Equities suffered their worst week since 2016 and subsequently fell over 4% on Monday as concerns over rising US Government bond yields spilled over into risk assets. As of Monday, US 10Y Treasury yields were at 2.84%, having increased from 2.4% at year end, resulting in a total return of -3.1% over the period. The majority of this move has come in the last 2 weeks which is why we are now seeing falls in equities. Last week US equities saw the largest retreat, falling -3.6% in Sterling terms, however all markets experienced a pullback. Emerging market equities lost -3.0% with perennial concerns about repaying debt denominated in US Dollars, however it remains in positive territory (1.6%) year-to-date. UK equities lost -2.9%, European equities -2.5%, while Japanese equities were least affected, down -2.1%. Sterling had a mixed week, down against USD and EUR but up 1.2% vs JPY. Global yields followed US yields upwards, as UK 10Y Gilt yields rose 6.6bps and German Bund yields rose 6.8bps. No asset classes were safe from the sell-off, with gold and oil down -1.2% and -1.0% respectively in USD terms.