In this report, we look at the key developments from the week of February 7th, 2021.
The markets experienced some volatility throughout the week due to rising US Treasury yields. The 10-year US Treasury yield rose to 1.41%, its highest level since March 2020 and is up from 1.12% earlier in the week. This rise was driven by optimism about the economic recovery as well as rising inflation expectations.
Equity markets also rose on the back of the economic recovery optimism. The Dow Jones Industrial Average closed the week up 1.5%, while the S&P 500 and the NASDAQ Composite both rose 0.7%. The major European markets also showed gains, with the FTSE 100, DAX, and CAC 40 all up around 2%.
In commodity markets, gold prices ended the week down 3.8%, as investors moved out of the safe-haven asset and into riskier assets such as stocks and bonds. Oil prices also fell after reports of an increase in Iranian exports following last week’s nuclear deal, though prices ended the week slightly higher as the market digested the news.
Cryptocurrencies also experienced a volatile week, with Bitcoin (BTC) prices dropping from over $58,500 to below $46,000 in the space of three days. Other major cryptocurrencies like Ethereum (ETH) and Litecoin (LTC) also fell, as investors took profit from the recent rally and moved to more stable investments.
In summary, the markets saw some volatility over the week of February 7th, as investors reacted to rising US Treasury yields, economic recovery optimism, and news of an increase in Iranian oil exports. Equity markets and most major commodities generally outperformed during the week, while gold and cryptocurrencies took a hit. Going forward, market sentiment will likely remain fragile as investors continue to take into account the potential risks to the economic recovery and geopolitical tensions.
This week's MIG Market Watch report looked at the key developments in the global markets from February 7th. Rising US Treasury yields drove investor optimism and were the main factor behind gains in equity markets, while gold prices fell as investors moved away from safe-haven assets. Oil prices experienced some volatility, as news of increased Iranian exports was followed by a slight recovery in prices. Cryptocurrencies also had a volatile week, as investors took profits from the recent rally and moved their money to more stable investments. Overall, markets are still fragile as investors take into account risks to the economic recovery and geopolitical tensions.
This article was contributed on Oct 21, 2023