Financial Markets Daily Report 21 August 2023
Greetings back to work in a week beginning with the downbeat echoes of Friday, when investors traded in a risk-averse mood. Sovereign bond yields ended the week sliding across the board, especially in Europe, and so did stocks, with the biggest falls in China. The USD was broadly flat, while commodities rose slightly.
- Greetings back to work in a week beginning with the downbeat echoes of Friday, when investors traded in a risk-averse mood. Sovereign bond yields ended the week sliding across the board, especially in Europe, and so did stocks, with the biggest falls in China. The USD was broadly flat, while commodities rose slightly.
- Despite Friday's moves, sovereign bond yields have risen since our last Daily Report, particularly long-term ones. The US 10y benchmark has gained 30 bps since the last week of July, as the resilience of the economy leads investors to expect higher interest rates for longer. In the eurozone hikes have been more modest, but spreads have widened.
- In this context, stock indices have fallen over the past three weeks, with the interest rate-sensitive Nasdaq being the hardest hit, along with emerging markets' indices, which have also been weighed down by weak Chinese economic data. The USD has strengthened, while Brent oil has been flat, and European natural gas prices have risen sharply.