Global Markets Overview is published and updated every month. This includes what has happened in markets, our macroeconomic outlook and price updates on assets such as government bonds, credit and equities.
In this Global Markets Overview
What’s been driving markets?
- US policymakers voted to keep the Fed Funds Rate on hold at 5.25% to 5.5%. The Fed’s closely watched dot-plots were also released. Median projections for inflation ticked up as did its policy rate projections. Notably, FOMC forecasts suggest only one interest rate cut this year, versus three cuts previously and policy rates are, ultimately, predicted to settle at 2.8% instead of 2.6% over the “longer run”.
- Political developments around the world continued to influence financial markets in June. US Treasury yields rose temporarily after the debate between US President Biden and former President Trump, perhaps because Trump’s policy proposals of tax cuts and tariffs are perceived as more inflationary. In any event, the immediate reaction by betting markets was a sharp fall in the odds of a Biden victory in the November elections.
- In France, high vote shares for the far-right and left-wing alliances in the first round of its elections, the uncertainty over the outcome, and France’s debt position, led to a big jump in the volatility of French financial markets. In bond markets, the premium that investors demand to own French bonds over German bonds widened to levels not seen since 2017, reflecting concern around a potential fall in fiscal discipline, depending on the election result. However, asset prices recovered partially in early July as it became clear there would be no far right or leftwing overall majority.
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Global Head of Asset Research at WTW
David is the Global Head of Asset Research at WTW, responsible for economic and capital market research. He also is a member of the Investment Assumptions Committee, who help guide investment policy globally.
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