Insights

Global equities have been directionless over the past few weeks. One notable economic development was the Canadian inflation report for May, which contained higher-than-expected numbers for the first time this year.

Expectations that central banks will lower interest rates in the coming months have moderated. Nevertheless, the global equity market is off to a reasonably good start this year, driven once again by the U.S. market and large-cap technology stocks

The U.S. Federal Reserve held interest rates steady in its policy update this week, following the path of other central banks

Global equity markets gave back some of their year-to-date gains so far in September, while government bond yields moved noticeably higher.

The second half of the summer has brought a slight decline in both equity and bond markets. Investors’ immediate attention is on third-quarter results from Canadian banks and takeaways from a major conference of global central bank leaders.

Investors have been tasked with interpreting a flurry of global economic data over the past two weeks, including signals of resilient but moderating growth in North America, broadening economic weakness in Europe, and a stalled recovery in China.

It has been a busy start to the summer. This week, the Bank of Canada raised its policy interest rate by 0.25%, as expected. Inflation figures released this week in the U.S. suggested that pricing pressures continue to ease.

The volatility of equity prices in global markets has recently been near multi-year lows, despite renewed uncertainty regarding the path of interest rates.