The week in 60 seconds
- Tariff shock → risk-off Friday. Markets sold off after a threat of steep new U.S. tariffs on China; the move hit tech, trade-sensitive names and small banks, and flipped the weekly tone negative.
- Oil down, gold up. Brent fell to multi-month lows on easing risk premia; gold extended its record-breaking run as investors sought insurance.
- Data fog into earnings. With parts of the U.S. data flow disrupted, investors turned to upcoming bank earnings for clearer macro signals.
Scoreboard
- Equities:
• S&P 500: WTD ↓ — risk-off into the close; YTD ↑ after a strong 2025 rally.
• STOXX 600: WTD ~flat to ↓ late-week as U.S. headlines bled into Europe; YTD ↑.
• FTSE 100: WTD ↓ after setting records the prior week; YTD ↑ and near highs. - Government bonds (10-yr):
• UK gilts / U.S. Treasuries: Yields drifted lower late-week as risk assets wobbled. (Read-through from risk-off session.) - FX:
• USD (broad): Firmed into risk-off; GBP softened on the day alongside European equities. (Wrap references.) - Commodities:
• Brent crude: WTD ↓; five-month lows on geopolitics easing and supply headlines.
• Gold: WTD ↑; probed ~$4,000/oz and logged another weekly gain.
What drove the moves
- Trade risk repricing: A fresh tariff threat re-ignited worries about global growth and supply chains, pressuring cyclicals and high-beta tech.
- Energy deflation pulse: Oil slid on ceasefire/supply developments, easing inflation fears but weighing on energy equities.
- Data uncertainty: With parts of the U.S. stats pipeline impaired, investors looked ahead to bank earnings as the next macro proxy.
Winners & losers
- Winners:
• Gold & select precious-metals plays on safe-haven demand. - Losers:
• Semis/AI-linked tech and trade-sensitive cyclicals on tariff risk; regional banks also weakened.
• Energy equities trailed with crude at multi-month lows.
Flows & sentiment
- Tone: Friday’s broad sell-off and a stronger USD indicate a risk-off skew into the weekend; volatility picked up as the rally “paused.”
- Our Risk-On/Off score:−1 (Risk-Off)
- VIX / equity drawdown: risk picked up into Friday (−1).
- HY vs IG / breadth: cyclicals and high-beta underperformed (−1).
- USD ↑ / Oil ↓ / Gold ↑: classic defensive mix (−1).
- Curve/yields: modest duration bid into risk-off (0 to +1). (Qualitative from wraps.)
Read-through: Hedge sensitivity rose; we keep equity beta near neutral and favour quality/liquidity until tariff noise clears.
UK corner
- Equities: After last week’s record high, the FTSE 100 faded mid-week and into Friday with global risk-off; banks and some domestics underperformed on specific headlines.
- Energy & consumers: Cheaper crude is a tailwind for UK consumers/transport, but a headwind for energy heavyweights in the index mix.
0 Comments