August Monthly Market Review

An excerpt from our August Monthly Market Review: Global equity markets plunged, and currency market volatility spiked in early August following a short-lived bout of deleveraging that included the partial unwinding of the iconic yen carry trade (see Special Topic). Equity markets soon rallied, however, more than recouping their early losses to close the month with solid gains. The outlook for monetary policy helped buoy sentiment. Powell’s Jackson Hole speech was, by the normally understated pronouncements of central bankers, virtually triumphant, raising expectations that inflation was set to continue to decline and interest rates to fall. The prospect of easing prices and policies underpinned a rally in the bond markets. U.S. bond prices rose across the maturity and credit spectrums. With optimism growing that the ECB would also cut rates in September, non-U.S. fixed income markets rose. The yen index surged in August. Gold reached an all-time high. The dollar fell against most major currencies. Oil prices slid 5.6%.

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