05/03/2021 Product News Back to all News & Views
Inflationary fears remained centre of attention this week, with the chair of the US Federal Reserve (Fed), Jay Powell, yet again confirming that the Fed will be in no hurry to raise rates, providing little comfort to investors.

10-year US Treasury yields, which move inversely to prices, touched as high as 1.58%, having started the year at 0.91%.  Highly valued stocks, often less sensitive to economic cycles, sold off, with US technology stocks falling 3.6% over the week.  In direct contrast global energy stocks rose 5.4%, supported by a further rally in crude oil prices.

As of 12pm London time on Friday, global equities fell 0.6% over the week, whilst US equities, with a high exposure to large cap technology companies, fell 1.1%.  European equities, with a greater weight in economically sensitive companies, rose 1.6%, with UK equities rising 2.8%.  Japanese stocks rose 1.7% and the Australian market gained 0.6%.  Emerging Markets were up 0.5%, with Latin America, having a higher exposure to commodities, rising 2.5%.

Whilst bond yields rose in the US, it was notable that the same was not repeated in Europe, with the yield on 10-year German bunds falling to -0.30, and UK gilts 0.77%.

Gold fell close to 2%, now trading at $1,695 an ounce.  Copper also dropped in price, falling by 1.1% to $405, but having rallied from just over $200 in March of last year.  Brent crude rose a further 3.7%, now trading at $68.6 a barrel, whilst US WTI (West Texas Intermediate) rose 6.4%, taking it to $65.5 a barrel after OPEC (Organisation of the Petroleum Countries) offered no further supply despite the substantial rise in price over the past year.

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