Equities

US markets came off record highs as core inflation surprised on the upside. The Nasdaq was particularly hard hit. European markets also trended weaker. Japanese markets suffered a bout of volatility, on uncertainty over latest Covid-19 restrictions, while China’s CSI 300 index gained strongly on latest macroeconomic data.

Bonds

US Treasury yields jumped midweek following the inflation data, before settling down later. In the Eurozone, both core and peripheral market government bond yields rose in sympathy, as did corporate bonds across the risk spectrum. Emerging market debt spreads tightened modestly last week, although returns were negative due to the rise in the US 10 year Treasury yield.

Currencies

Sterling put in another strong performance across the board, while the dollar gained against the euro and the yen. The euro rose relative to the yen, which was weaker against all majors.

Commodities

Oil had a volatile week on rising Middle East tensions. Iron ore prices hit record highs, as demand from China soared. Gold crept higher in response to rising inflation data.

Responsible investing

In a surprise nod towards responsible best practice, Elon Musk tweeted that Tesla will no longer accept bitcoin as payment, due to the digital currency’s negative environmental impact.