Market Action

• Both equity and fixed-income assets sold off this week, posting poor results for the second straight week. The drama in Greece and the impact currencies are having on asset markets continue to dominate the news.
• After the strong jobs report released on Friday, detailing 280,000 new jobs created in May, bond yields shot up to their highest point of 2015. Equity markets also sold off during the day despite the good news. Markets seem to be greeting good economic data with a reason to sell, anticipating a rate increase from the Federal Reserve.
• With yields reaching 2015 highs, interest rate sensitive assets continue to sell off. Utilities and Telecoms were two of the worst performing sectors this week while other classes, such as REITs, also fell during the week.
• Greece missed its payment to the IMF due on Friday in the amount of roughly €300 million. Greece’s agreement with the IMF allows for payments due during the same month to be bundles, saving Greece the official label of default. Despite public rhetoric, officials are said to be privately optimistic about a new deal being agreed to next week.
• As expected, OPEC announced that production schedules would remain steady for the time being. Crude markets sold off in response to the news.
• India cut interest rates again this week. Inflation has remained subdued in the economy despite impressive growth in 2014 and through Q1 2015. The rupee declined against the dollar as a result of the move.
• Inflation is accelerating faster in the EU than forecasters have expected according to data this week. During Mario Draghi’s press conference the President of the ECB quashed the notion that the ECB may cut its QE policy short if results hold. Nevertheless, European bonds, and Bunds in particular, have quickly reversed from levels earlier this year.

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