Market Comment | Markets cap a rough week with modest gains

Summary

Major global equity indices advanced today, reflecting investor appetite for risk assets, but not enough to salvage a tumultuous week battered by intensifying trade tensions, lackluster activity data and increased uncertainty on Brexit trajectory following UK PM May’s decision to quit.

Key points

• Key points:
• This week was rough for financial markets, as escalating US-China trade tensions weighed on equity markets and pushed safe haven bond yields to multi-year lows.
• The US yield curve flattened, with the 5Y-2Y and the 10Y-3m slopes inverting and pressure on EMs assets (including corporate and sovereign spreads) increased.
• In FX markets, investors sought shelter in safe-haven currencies, whereas the GBP underperformed dragged by Brexit led political crisis.

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