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Financial Market Highlights

Posted May 31, 2012 by Editor

[private]

  • Yields (10yr Treasury) plunge past historic lows on Eurozone crisis, risks to growth, shortage of “safe” assets.
  • S&P returns favored traditionally-defensive sectors.
  • Market has reversed any pricing-in of Fed tightening by year-end 2013. Fed focused on heightened downside risks.
  • Credit spreads and CDS indices widened across the board, European sovereigns and banks (Spain) back in the crosshairs.
  • Measures of forward inflation expectations are now in the lower half of their post-crisis ranges.
  • Dollar clear beneficiary of risk-off flows. Yen weakening trend interrupted by same factors.

FinMkt Highlights5-30-2012[/private]