Global equities were mixed last week. The S&P/ASX 200 declined by 0.5% with financials, energy and resources performing strongly in the face of rising interest rates and energy prices, while utilities and telecommunications suffered. The S&P 500 declined 0.5% with energy, industrial and materials sectors also gaining ground at the expense of real estate, utilities and IT. Small caps outperformed in the U.S. with IJR and IRM amongst the top performing ETFs for the week. The EURO STOXX 50 gained 0.2% as Italy moved closer to a populist coalition, while the Nikkei 225 gained 0.8%. BetaShares Global Energy Companies ETF (FUEL) was the top performing ETF for the week. VanEck Vectors Australian Banks ETF (MVB) was the top performing domestic equity fund.
The U.S. 10-year Treasury yield jumped 9 basis points to reach a new 7-year high above 3%, while the Australian 10-year Government Bond yield rose 12 basis points. The U.S. dollar gained against the Aussie, euro and yen last week. The Australian dollar ended the week at US75.1c.
Crude oil continued to climb, with Brent Crude briefly topping US$80/bbl for the first time since 2014. Precious metals fell on rate-rise concerns, with gold suffering its worst week of 2018, down 2.0%. Platinum continued its downwards trajectory in 2018, falling 3.9% for the week to end 12.7% below its January peak.
The Australian ETF market saw inflows of $103m into and outflows of $87m from domestically domiciled funds last week. The largest inflows were into BetaShares Australian High Interest Cash ETF (AAA), while the bulk of outflows were from SPDR S&P/ASX 200 Fund (STW).