12 February 2018

Bassanese Bites: Inflation Watch – Week beginning: 12 February 2018

Volatility is back! It was a wild week on global markets with US stocks whipsawing wildly as investors attempted to find a bottom to the latest market sell-off.  As reflecting concerns with inflation, US 10-year bond yields still managed to rise (2bps) last week despite the 5.3% decline in the S&P 500, while the $US also firmed 1.4%.  Such is the state of nervousness, US stocks slumped on Thursday due to a lift in global bonds yields – caused by hawkish rhetoric from, of all places, the Bank of England. Unlike most central banks, the BOE has inflation higher than it would like, though this largely reflects the post-Brexit slump in the Pound.

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