Global Weekly Outlook

Week of August 17–21

Higher rates, inflationary pressures, and mixed growth signals shaped the week.

Markets experienced a more volatile week, with U.S. Treasury yields rising and inflationary pressures resurfacing. While the U.S. and Europe face elevated rates, Asia showed signs of slowing momentum.

United States

• The 30-year Treasury yield reached its highest level since 2007 amid mounting fiscal and geopolitical pressures. The Fed remains open to raising rates if inflation persists.

Europe

• Inflation rose to 2.9% in both the Eurozone and the U.K., driven by energy prices. In contrast, investor confidence in Germany improved despite elevated energy costs.

Japan

• GDP grew 0.3% quarter over quarter in Q2 but lost momentum amid weak domestic demand. Annual inflation rose to 1.9%, its highest level since December.

China

• Industrial production growth slowed to 4.5% year over year, while retail sales rose just 0.6%, reflecting weak domestic demand and a sharp contraction in auto sales.

Argentina

• Economic activity grew 2.7% year over year in June, exceeding expectations. Growth was broad-based, with 12 of 15 sectors expanding and strong performance in fishing and mining.

Brazil

• The economy grew just 0.2% in Q2, showing signs of slowing momentum. Industry expanded, while services contracted amid a persistently high interest rate environment.

Mexico

• Inflation eased and GDP rebounded in Q2, although Banxico may keep rates elevated for longer. Tax revenues edged higher, while retail sales grew 2.7% year over year.

“The single greatest edge an investor can have is a long-term orientation.”
— Seth Klarman

Upcoming Events

• United States: Employment-related data will be released — 08/25
• United States: Preliminary Q2 GDP growth will be released — 08/26

Market Monitor

Indicative prices as of 10:00 AM EST