Weekly market review
Week ending 11th March 2016
It was a mixed week. The UK stock market fell 0.7%, but Europe did better. The Euro STOXX 600 ended up 0.2%, after several supportive policy changes were announced by the European Central Bank (ECB). This appeared to reflect doubt that moving further into negative territory would reinforce economic recovery. The US stock market was up 1.2% off the back of promising employment data, and the Chinese Shanghai index was down 3% after the National People’s Congress laid out plans for economic reform.
The UK and US 10-year yields rose to 1.57% and 2% respectively. Core Eurozone sovereign yields saw less volatility, with the German 10-Year Bund ending the week at 0.27%, although Portugal’s 10-year bond yield fell to its lowest level in a month, 2.75%. Other European bond yields fell on Thursday after the ECB delivered its stimulus package.
The pound continued to recover, as markets reprice the “Brexit” premium, closing the week at 1.44. The Euro initially fell, though quickly reversed as ECB President Draghi signalled to the markets that further cuts are unlikely. It ultimately appreciated against the US Dollar.
West Texas Intermediate crude oil continued its rally, ending the week at $38.50/barrel. US crude inventories remain at record highs and a slowdown in Chinese demand continues to weigh on prices.
Source: Goldman Sachs Asset Management. Adapted by FundCalibre. This material is for information purposes only and does not in any way constitute financial advice.
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