Global Market Summary
Global bond yields moved lower over the week as expectations of rate cuts by the U.S. Federal Reserve continued to be broadly supported by incoming economic data. Initial and continuing jobless claims were little changed and do not appear to suggest that labor market weakness is sufficient to translate into a marked increase in the pace of layoffs that would be a concern. At the same time, July retail sales data came in stronger than expected at 1.0% month-on-month, indicating the consumer remains healthy despite the drift up in the unemployment rate. In Europe, preliminary PMI data for August suggest some improvement, with composite PMI up 51.2 from 50.2 in July. Spreads tightened across major credit sectors, and total returns were positive. The U.S. dollar retreated against the euro and the average spot currency performance in emerging markets was positive for the week.
