Push Back – ShareCafe




Global markets*

Global equities continued their impressive rebound over the past week, helped by dovish news from several central banks which in turn lowered bond yields. The S&P 500 rose 2% over the week, with U.S. 10-year bond yields dropping 10 basis points to 1.45%. The $US, meanwhile, held firm.

For starters, the Fed surprised no-one – formally announcing the commencement of bond tapering at US$15b per month. Equally important, Fed chair Powell reiterated his view that the current lift in inflation – although larger and more persistent than expected – was likely only transitory, reflecting a COVID-related surge in goods demand that supply chains have been unable to accommodate. U.S. equities also continued to bask in the warm afterglow of a red hot Q3 earnings reporting season.

The Bank of England did surprise, however, refusing to lift rates despite earlier hawkish signals and the market fully expecting a hike….

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