This week, Fed Chairman Ben Bernanke acknowledged that “The world is suffering through the worst financial crisis since the 1930s, a crisis that has precipitated a sharp downturn in the global economy,” during a speech on reforming the financial sector.
U.S. Treasury yields continue to settle in to a trading range, exhibiting little volatility this week as investors pause to assess the direction of economic growth and inflation.
The stock market rallied for the first time in five weeks due to positive comments from banks regarding profits for the quarter.
Investment grade primary activity remained rampant as the search for any incremental yield continues to be the major driving factor in the mind of investors.
The agency mortgage market benefited from a recovery in equity valuations and benign movement in Treasury yields.
Municipal bond market weakness continued this week. While shorter-maturities were broadly unchanged over the course of the week, the 10-year maturity range showed the softness in the market.
The markedly improved tone in the global equity markets since the beginning of the week is aiding with the stability of the high yield market. more...
Western European Equities
Stocks in Western Europe gained ground over the past week. The stocks with the best performance were banks (+21.8%) and insurance (+17.2%).
Eastern European Equities
The CECE index of equities traded in Central Europe (Czech Republic, Hungary, and Poland) gained +10.8% this week, while the Russian stock index RTS went up by +13.2%.
Global Bonds and Currencies
Major sovereign bond markets were mostly weaker in the past week, with the exception of the long-end of the UK Gilt curve, which continued to benefit as the Bank of England (BoE) began its £75 billion (US$106 billion) program of quantitative easing.
Emerging market dollar-pay debt spreads tightened this week as a result of the more positive tone to risk markets. For more information, please contact 800 5-PAYDEN or visit payden.com.
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Have a great weekend!