After a mostly negative reaction to Federal Reserve Chair Kevin Warsh’s press conference Wednesday following the Fed policy statement, Thursday brought us a surprise upside reversal in most markets.
Despite our concern that last weekend's doomed US-Canada trade talks would unsettle sentiment, most markets shrugged off the impasse and instead held up fairly well.
We generally saw less hectic conditions in the various markets this past week as the lack of significant geopolitical or macro headlines kept volatility somewhat at bay.
LME Clear increased member renminbi collateral limits, shortened collateral notice periods and approved Hong Kong warrants for collateral use.
There were a number of dizzying geopolitical headlines coming out of Washington and the Persian Gulf this past week that played havoc with the various markets.
There was a lot going on this past week on both the geopolitical and economic fronts. Investors were fixated on the two-day visit to China by President Trump. He arrived in Beijing last Wednesday night, with a massive corporate delegation in tow. Expectations were high that some progress would be made on a host of thorny issues. But at the end of the day, the trip produced relatively modest results.
The Iran war enters its third month this week with few promising off-ramps materializing for a possible end to the conflict.
We had another very sloppy week in the US equity markets, although commodities fared better. All three major equity indices are now in correction territory (down 10% or more from their highs) on account of both the Iran war and the rising interest rates the conflict is generating.
Markets remained frazzled last week as the conflict in the Persian Gulf entered its fourth week – with no end in sight.
The Federal Reserve held rates steady while modestly raising inflation and growth projections, highlighting uncertainty tied to geopolitics and tariffs.