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Archinomics Weekly - Monday 21st June 2021

4 months ago

the
MARKETS

Equities

Federal Reserve comments about the possibility of raising interest rates and tapering monetary support caused volatility in the stock markets. In the US the S&P 500 fell 1.9%, while Europe’s Euro Stoxx 50 was 1% lower. Asian and emerging markets were broadly lower, although Japan’s Topix rose slightly as the Japanese government relaxed restrictions slightly.

Bonds

10-year US Treasury yields ended the week slightly higher at 1.44%. The yield rose (and prices fell) in the wake of the Federal Reserve meeting, and European government bonds followed suit. Investment grade corporate bond yields were lower in the US but higher in Europe, while high yield bond yields were higher in both regions.

Currencies

The US dollar was the standout performer last week, rising against the euro, Japanese yen and sterling. The euro was stronger against sterling but weaker versus the dollar and yen. Sterling was weaker against the dollar, euro and yen.

Commodities

It was a tough week for many commodities. Gold fell 6% to $1,764 per ounce, while copper finished the week 8.4% lower. Meanwhile the price of oil was slightly higher, with Brent Crude rising 1.1% to $73.0 per barrel.

Responsible investing

The UN’s $85 billion staff pension fund has announced it will reduce its investments’ carbon emissions by 40% by 2025, as it progresses towards achieving net zero emissions by 2050.

MACROECONOMIC
UPDATE

Forecasts from the US Federal Reserve hinted at the possibility of raising interest rates in 2023, causing volatility in the markets.


The European Commission signed off Spain and Portugal’s Covid-19 recovery plans – the first two national plans backed by the region’s €800 billion NextGeneration EU programme.

on the
RADAR

US May headline CPI are forecast to rise further to 4.7%, after 4.2% in April.


The monthly meeting of the ECB is unlikely to bring any changes in policy, although adjustments to the emergency bond-buying programme could be discussed.

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