Weekly Market Overview– Equities fall on rising US yields
Weekly Market Overview– Equities fall on rising US yields
Weekly Market Overview– Equities fall on rising US yields
Tue 06 Feb 2018
Equities suffered their worst week since 2016 and subsequently fell over 4% on Monday as concerns over rising US Government bond yields spilled over into risk assets. As of Monday, US 10Y Treasury yields were at 2.84%, having increased from 2.4% at year end, resulting in a total return of -3.1% over the period. The majority of this move has come in the last 2 weeks which is why we are now seeing falls in equities. Last week US equities saw the largest retreat, falling -3.6% in Sterling terms, however all markets experienced a pullback. Emerging market equities lost -3.0% with perennial concerns about repaying debt denominated in US Dollars, however it remains in positive territory (1.6%) year-to-date. UK equities lost -2.9%, European equities -2.5%, while Japanese equities were least affected, down -2.1%. Sterling had a mixed week, down against USD and EUR but up 1.2% vs JPY. Global yields followed US yields upwards, as UK 10Y Gilt yields rose 6.6bps and German Bund yields rose 6.8bps. No asset classes were safe from the sell-off, with gold and oil down -1.2% and -1.0% respectively in USD terms.