Global bonds rose while equities were mixed over the week.
UK
The FTSE 100 rose 0.2% over the week.
The Bank of Eng¬land kept rates on hold but left the door open for reduc¬tions later in the year.
US
The S&P 500 slid 0.2% over the week while the Nasdaq lost 0.8%.
The US Federal Reserve (Fed) kept rates on hold at its March meeting. Fed officials also indicated that they expect 50 bps of rate cuts this year, unchanged from a previous projection in December. The Fed’s latest projections showed officials expected GDP growth to slow to 1.7% this year while inflation was expected to higher than prior forecasts at 2.7%.
Treasury Secretary Scott Bessent warned in an interview that there are “no guarantees” that the US will escape a recession.
US retail sales rose 0.2% in February, below forecasts.
Tesla shares have now lost half their value compared to December’s high.
Shares of FedEx fell sharply after the company lowered its earnings forecasts due to persistent “weakness and uncertainty in the US industrial economy”.
Europe
The Eurofirst 300 gained 0.6% over the week.
European Central Bank president Christine Lagarde said Donald Trump’s trade war could deal a heavy blow to the Eurozone economy. A 25% US tariffs on EU exports could reduce Eurozone economic growth by about 0.3% in the first year while retaliatory measures could lead to the bloc’s economy suffering as much as 0.5%.
Germany’s parliament has approved Friedrich Merz’s plans to inject up to €1tn into the country’s military and infrastructure.
The Swiss National Bank cut rates by 25 bps to 0.25%, citing low inflationary pressure and increased downside risks. Policymakers indicated further rate cuts are unlikely.
Japan
The Nikkei 225 rallied 1.7% over the week.
The Bank of Japan held rates steady as it continued to assess the potential impact of higher US tariffs on Japan’s economy.
Japan’s core consumer price index rose 3.0% year on year in February, slowing from January’s 3.2%.
Pacific Basin ex Japan
ASEAN stock markets have been among the worst performing so far this year amid concern of a global trade war compounded by investors rotating back into Chinese equities. The Indonesian and Thai stock markets have been some of the worst performing this year. Indonesian stocks fell sharply to a four-year low during the week amid growing concerns over weakening consumer spending and President Prabowo Subianto’s costly fiscal policies. Thailand, south-east Asia’s second-largest economy, has also been grappling with slower consumption and private investment. In contrast, Chinese equities have been some of the best-performing assets globally this year, as investors pile into tech stocks in the wake of Chinese start-up DeepSeek’s advances in artificial intelligence.
In China, retail sales rose 4.0% in the January-February period from a year earlier, marking the quickest growth rate since November. Industrial output grew 5.9% year on year in the first two months of the year, while fixed asset investment increased 4.1% in the January-February period year on year, above expectations and December’s 3.2% pace.
Emerging Markets
The MSCI EM Index advanced 3.1% over the week in USD terms.
Turkish assets fell after Istanbul mayor Ekrem İmamoğlu, the main political challenger to President Recep Tayyip Erdoğan, was arrested ahead of the upcoming presidential elections.
Brazil’s central bank lifted its benchmark interest rate by 100 bps to 14.25%, the highest level since October 2016.
Bonds
The yield on the 10-year US Treasury bond slid 5 bps over the week to close at 4.25%, while the yield on the 2-year note also slid 5 bps to 3.95%.
The yield on Germany’s 10-year Bund fell 12 bps to 2.76%, while 10-year UK Gilt yields rose 4 bps to 4.77%.
Debt servicing costs for the top 38 OECD countries are now at their highest level since 2007.
Commodities
Oil prices rose after the US issued fresh Iran-related sanctions, including on two Chinese petrochemicals groups for allegedly importing Iranian crude oil.
Currencies
The British pound climbed above US$1.30 for the first time since early November, helped by persistent UK inflation and a broad weakening in the dollar.
