market monitor

Market Monitor Chart of the Week: A Hawkish Shift Macro Interest rate markets have shifted in a hawkish

Market Expectations for 59 54 direction across the world, largely driven by the 42 ongoing energy supply disruption. We believe that

Cumulative Change 36 38 central banks may see through this supply shock, 31 which is unlikely to produce a lasting inflationary impulse and may even start to weigh on consumer in Policy Rate (bps) spending if it is not resolved soon. We consequently see opportunity at the front of the curve, particularly in the UK where the economic 2026 YE 2027 YE 2026 YE 2027 YE 2026 YE 2027 YE backdrop is weaker, while long-end yields might Fed BoE ECB remain elevated, supported by fiscal concerns and an AI-led growth repricing. Source: GS Global Banking & Markets and GS Asset Management. As of July 29, 2026.

SAS Market Strategy Market Summary Economic Summary Global Equities: US equities rose last week, led by a recovery in Monetary Policy: The Fed left rates unchanged at 3.5-3.75% last semiconductor stocks and strong mega-cap tech earnings results. week, although three participants dissented in favor of a 25bp Renewed inflation concerns following the Fed decision weighed on hike. Fed Chair Kevin Warsh noted that the Fed would “not hesitate the index, but the S&P 500 ended up 1.06%. European equities to act” to rein in inflation but suggested that the increase in market rallied toward the end of the week due to strong performance from interest rates could deliver tightening without a hike. The bond tech shares and solid corporate earnings, with the STOXX 600 market is now pricing a 60% chance of a hike in September, but we rising by 0.74% and reaching a record high at one point intraday. still expect the Fed to remain on hold over the remainder of 2026. After falling for much of the week, South Korea’s KOSPI posted a The BoE kept rates unchanged at 3.75% in a 6-3 split vote, its fifth record one-day gain of more than 17% on Friday. The index still consecutive hold. While the majority favored maintaining the ended the week down –1.42%. current rate to assess the impact of Middle East energy shocks, three dissenters voted for a 25bp hike, citing concerns over Fixed Income: US Treasury yields were mixed last week, with the persistent second-round wage and price effects. The BoJ kept its 2-Year yield falling and the 10-Year rising. The 2-Year yield policy rate unchanged at 1.0%. One board member dissented in retreated to 4.29% after the Fed held rates and delivered the favor of a 25bp hike, while the Policy Board reiterated its readiness largest non-cut dovish surprise since 1997. The 10-Year yield, to raise rates. however, rose amid concerns that the Fed is falling behind in its inflation fight, ending higher at 4.73%. At one point, the 30-Year Inflation: US core PCE came in at 0.1% MoM and 3.3% YoY in June yield hit 5.24%, its highest level since 2007. The 10-Year German against expectations of 0.2% and 3.3%, respectively. We expect Bund yield was close to flat, initially falling on lower oil prices but core inflation to improve over the coming months, as the effects of rising after the Fed’s hold. It ended the week higher at 3.21%. tariffs, AI-related price pressures and energy supply disruptions fade. Euro area preliminary headline and core CPI for July ticked up Commodities: Oil prices fell last week as crude flows through the to 2.9% and 2.5% YoY, respectively. This increase was primarily Strait of Hormuz picked up and Saudi Arabia formed an driven by surging energy prices and sticky services inflation, international coalition to protect shipping through the Red Sea. strengthening our expectation of an ECB rate hike in September. WTI and Brent Crude ended the week down at $84.67 and $90.12/bbl, respectively. Gold briefly fell below $4,000/troy oz as Activity: US real GDP grew by 1.5% annualized in Q2, below expectations of rate hikes grew leading up to the Fed meeting, but consensus expectations of 2.1%, but its composition was strong, rebounded after the Fed held rates. It still ended the week down at featuring resilient consumer spending and solid investment. Euro $4,046/troy oz. area preliminary…