Equities

Major indices suffered a second consecutive week of losses, as tensions on the Ukrainian border added to inflation concerns. In the US the defensive consumer staples sector outperformed. In Europe, the Stoxx 600 index ended the week 1.86% lower, as the crisis in Ukraine appeared to escalate. Markets in Japan were weaker, driven by fears of more aggressive US monetary policy. Onshore Chinese markets rose, as a drop in reported inflation boosted risk appetite.

Bonds

US Treasury yields fluctuated on conflicting forecasts for interest rate rises and the Ukraine situation. Core eurozone bond yields ended the week lower, and prices rose, as fears over geopolitical developments intensified. Spreads widened in the US corporate bond markets, particularly in the high yield sector, on concerns over potential sanctions on Russia.

Currencies

The euro was weaker across the board, while the yen made ground against all majors. The US dollar showed gains against the euro only, reflecting the slightly less hawkish tone of the US Federal Reserve’s latest minutes.

Commodities

Oil pushed above $96 per barrel early in the week, on fears of a Russian invasion of Ukraine. Gold, viewed as a safe haven asset, hit its highest level since June last year.

Responsible investing

Following recent trends on US executive pay, an element of the $20 million remuneration of Starbucks CEO Kevin Johnson was in reward for reductions in methane emissions and the use of plastic straws.