Risk Assets Bounce Back Amid Softer Inflation and Rate Hike Odds Slipping

Global equity markets experienced a broad advance last week, defying an ongoing stalemate in the Strait of Hormuz. The softening US inflation data and rising expectations that the Federal Reserve will not hike rates this year contributed to the positive sentiment.

The S&P 500, Nasdaq, and Philadelphia Semiconductor Index all posted gains, while European equities lagged with more muted advances. The 10-year Treasury yield climbed near a high of 4.7%, pressured by elevated rates at long-end auctions and the New York Fed's pause in reserve management purchases.

Commodities broadly recovered, with WTI crude reclaiming the $80/barrel level. Agricultural prices also bounced significantly, led by wheat which rose 5.35% and corn which increased by 4.73%. However, Henry Hub natural gas fell 4.37%.