Global Markets Remain Volatile Amid Geopolitical Tensions and Inflation Concerns
Global equities ended last week little changed in local currency terms, up slightly in sterling. The US underperformed compared to the UK and emerging markets amid ongoing market volatility since early June peaks. Government bond yields rose as tensions between Iran and the US escalated, with renewed attacks affecting key shipping routes like the Bab El Mandeb Strait. Oil prices surged above $100 per barrel mid-week due to fears of a broader conflict but retreated slightly after initial peace talks began over the weekend. However, uncertainty remains high following Iran's recent statement rejecting new negotiations. The resurgence in oil prices has reignited concerns about potential interest rate hikes by central banks later this year. Inflationary pressures have eased somewhat in the UK with headline inflation dropping to 2.6% and core wage growth slowing. Consumer sentiment improved, supported by unexpected retail sales gains and a rebound in business confidence.
Topics: equity markets geopolitical tensions government bonds oil prices