RHB’s research believes that the Fed isn’t done with its rate hikes and hence market volatility may not have come to an end. RHB says its “top down views on global economics and inflation are that we believe risks are rising and US Treasury 10-year bond yields could hit 4.5%-5.0% by end-2023 versus our current baseline forecast of around 4.4%”.
The US Federal Reserve’s minutes from the July Federal Open Market Committee (FOMC) meeting will notably be scrutinised next week (August 14-18), notes S&P Global Market Intelligence. July’s US PMI data revealed continued but slower growth for services while manufacturing output expanded marginally. The 10-year yield on US treasuries did not act in a positive manner and remains comfortably above 4%.
The latest S&P Global Investment Manager Index survey showed that concerns over valuation heightened in August among US equity investors. “This stemmed from both an elevated US market valuation and worries over the outlook amid lingering central bank policy and macroeconomic risks,” S&P Global Intelligence says. “Next week’s releases will therefore provide further insights as to whether these equity market woes deserve greater attention or otherwise.”
