Market Action

•   Equities markets around the globe suffered considerable losses throughout the week. European markets highlighted a poor week as multiple nations reported weak industrial activity, lending continues to contract and Portugese banking worries pushed investors into safe assets.
•  The selloff in risk assets pushed funds into safe assets this week. Yields on US Treasury securities fell while gold continued its 2014 rise. Energy assets also fell during the week given the poor European data and Libyan supply reentering the market.
•   Fed minutes released this week revealed that the FOMC has agreed to cease QE operations in October this year. The Federal Funds rate will continue to remain accommodative for the foreseeable future with debate growing about when to raise rates and how quickly. The Unemployment rate fell to 6.1% before the July 4^th holiday weekend.
•   In credit markets the growth rate of consumer credit remains positive. However the repo market saw increasing trends of failure. Some analysts are concerned that a shortage of Treasury securities is bringing instability into the short term lending market.
•   Argentina is meeting with an appointed mediator in an attempt to resolve its dispute with holdout creditors. The South American nation has until the end of July to reach a settlement, pay what is owed, or face default.
•   US Treasury Secretary Jack Lew is in Beijing meeting with his Chinese counterpart. Reports out of China suggest some form of understanding about exchange rate dynamics between the two nations has been reached.

View Full Market Update (PDF)