Deutsche Bank’s analysis highlights several key market developments last week. The US Dollar Index was the strongest-performing G10 currency, rising by +0.81% over the week, driven by a surge in Treasury yields and a more hawkish Federal Reserve outlook. On Friday, however, the Dollar Index dipped by -0.25% [1]. Gold prices fell -2.14% for the week, with a slight recovery of +0.23% on Friday, as higher real and nominal yields pressured non-interest-bearing assets [1].
Despite the rates selloff, global equities, including the S&P 500, demonstrated resilience. The S&P 500 gained +1.21% last week (+0.51% Friday), leaving the index within 1% of its record high. Optimism on growth and strong PMI data contributed to this performance, with tech stocks such as the Magnificent 7 playing a significant role. European equities also saw gains, with the STOXX up +0.50% (+0.35% Friday), and Japan’s Nikkei rising +2.07% (+1.30% Friday) [2].
Brent Oil experienced renewed upside, trading above $107 this morning after a weekly gain of +2.58%. The increase is attributed to heightened Middle East tensions, particularly the lack of progress in US-Iran negotiations and Iran’s refusal to soften its conditions for reopening the Strait of Hormuz. Iran’s Foreign Minister Abbas Araghchi reiterated demands for sanctions relief, access to frozen assets, and an end to US blockade measures. The geopolitical risks have contributed to both higher oil prices and rising US bond yields, with 10-year yields up +3.8bps and 2-year yields up +4.6bps this morning [3].
The Deutsche Bank reports collectively underscore the interplay between rising yields, currency strength, equity resilience, and commodity price movements, all influenced by evolving monetary policy expectations and geopolitical developments.
CONCLUSION
Markets saw significant moves last week, with the US Dollar strengthening, equities holding near record highs, and Brent Oil climbing on geopolitical risks. Rising Treasury yields and hawkish Fed expectations drove currency and commodity shifts, while optimism on growth supported equities. Geopolitical tensions in the Middle East remain a key factor for oil and bond markets.