Weekly market review
Week ending 22 July 2016
Corporate earnings and economic data set a positive tone for global equities. The UK stock market reached its highest level in almost a year, amid hopes of stimulus from the upcoming Bank of England meeting. Following earnings releases for the 2nd Quarter this year, the US stock market hit a record high, but pared those gains in the wake of a weak manufacturing report, ending the week up 0.64%. The EuroStoxx 600 index traded roughly flat, with the European Central Bank standing pat and investors digesting mixed earnings and economic releases.
US 10-Year Treasury bond yields held their 4-week highs, supported by generally positive data, including declining jobless claims. In spite of the more positive tone, yields remained below pre-Brexit vote levels as of Friday. The UK 10-year government bond yield fell slightly to close the week at 0.798%, while Eurozone sovereign bond yields were mostly flat, as resilient Purchasing Managers' Index data out of the single currency bloc helped offset a disappointing German business sentiment survey.
The US dollar Index inched up 0.86%, reaching its highest level in four months. The British pound traded in a choppy pattern amid mixed data releases and central bank commentary. In Japan, fresh stimulus hopes helped sustain the yen’s move lower from early-month highs. Following the prior week’s failed coup attempt by military members to overthrow the government, the Turkish lira fell to a new record low on the back of Standard & Poor’s downgrading its sovereign credit outlook and analysts warning of more unpredictable capital flows.
Oil traded near $44 a barrel, falling to its lowest level in more than two months. Although a government report indicated US crude stockpiles fell for the ninth week, they still remain more than 100 million barrels above the five-year average. Oil has dropped over 10% since hitting 2016’s peak in early June.
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Source: Goldman Sachs Asset Management. Adapted by FundCalibre. This material is for information purposes only and does not in any way constitute financial advice.