Equities end the week flat after recovery

Concerns of a recession lessened on Thursday as technology and other large-cap stocks improved due to strong quarterly earnings. Additionally, weekly jobless claims were lower than anticipated, dropping by 17,000 for the week, which helped alleviate worries triggered by the previous Friday’s July jobs report. Following the release of this data, US stocks rose, and benchmark Treasury yields climbed back above 4%.

Data released on Friday indicated that inflation in Germany, as measured by the Harmonized Index of Consumer Prices (HICP), increased by 2.6% year-on-year in July, aligning with market expectations for the eurozone’s largest economy. Following this data release, the EUR/GBP traded in negative territory for the third consecutive day on Friday.

Last week, the Bank of England (BoE) reduced its benchmark interest rate to 5.00% from a 16-year high of 5.25%. The UK hinted that the central bank would adopt a cautious approach in its policy normalization process moving forward.

In China, concerns about deflation diminished this week as consumer prices increased. China's consumer prices (CPI) rose by a higher-than-anticipated 0.5% in July, reaching a five-month peak, compared to the 0.2% rise in June. Core CPI, which excludes the volatile costs of food and energy, saw a year-on-year increase of 0.4% in July, down from 0.6% in June. This data offered some much-needed positive news for the world's second-largest economy.

Equities

Global stocks were flat last week finishing at 0.0% in euro terms and local terms. Year-to-date global markets are up by 11.0% in euro terms and by 9.8% in local terms. The US market, the largest in the world, finished at 0.0% in euro terms and local terms.

Fixed Income & FX

The US 10-year yield finished at 3.9% last week. The German equivalent finished at 2.2%. The Irish 10-year bond yield finished at 2.6%. The Euro/US Dollar exchange rate finished at 1.09, whilst Euro/GBP finished at 0.86.

Commodities

Oil finished the week at $77 per barrel and is up 8.4% year-to-date in euro terms. Gold finished the week at $2,431 per troy ounce and is up 19.2% year-to[1]date in euro terms. Copper finished the week at $8,747 per tonne.

The week ahead

Tuesday 13^th August

UK unemployment data is released.

Wednesday 14^th August

US CPI figures go to print.

Thursday 15^th August

US retail sales figures are published.