Market Action

• Stock markets in the US posted their first gains in three weeks. The S&P 500 closed at a record high on Friday despite little in the way of earnings or economic news this past week.
• US Treasury Bonds dominated market commentary early in the week as yields broke through 2.5% during the week but finished slightly higher than last week as equities rallied.
• Greater consensus is emerging in the Eurozone on monetary stimulus. Negative deposit rates amid other easing tools are expected to be announced at the ECB’s June meeting. Pricing data reported during the week was weak
• Fed minutes published this week revealed a growing debate on the trajectory and tools to be used in winding down easing policies. NY Fed President Dudley advocated continued support of the mortgage market while the sector recovers.
• China and Russia signed a historic gas deal, said to be valued at over $400 billion. Details on pricing were not reported.
• Geopolitical tension in Asia remains high. The row between China and Vietnam over the installment of an oil rig took a back seat to a military coup in Thailand where political nerves have been straining for months. Emerging markets funds seemed untroubled by the news.
• The Nikkei Index posted strong gains during the week. Central Bank Governor Kuroda publicly urged Prime Minister Abe to speed up the pace of domestic reform
• New home sales in the US beat expectations, rising 6.4%
• Weekly jobless claims bounced off of their seven year low reported a week ago but analysts insist momentum is heading in the right direction.

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