US equities fell last week amid growing concerns of weaker global growth and a more dovish policy turn by the ECB. Further losses were seen on Friday as the nonfarm payrolls report disappointed expectations by rising only 20,000, significantly below estimates of 180,000 and the lowest number in more than a year. Overall, the S&P 500 Index fell 2.2%, and Canada’s S&P/TSX Composite Index fell 0.4%.

European equities fell last week after Thursday’s dovish turn by the ECB – which was accompanied by marked falls in the inflation and growth forecasts. This outweighed the gains made earlier in the week on the back of optimism of a US-China trade deal. The EURO STOXX 50 Index fell 0.9%, and at the country level, Germany’s DAX fell 1.2% and France’s CAC 40 fell 0.6%. All other major national bourses also ended the week lower with the exception of the UK’s FTSE 100 Index, which remained relatively unchanged (+0.0%). Early week gains supported by weaker sterling were erased amongst co-ordinated stock market losses after Thursday’s ECB meeting.

Asian stocks retreated over the week, especially at the end of the week, in the aftermath of US equity market declines as market sentiment deteriorated amid global growth concerns. Japanese stocks underperformed as the yen appreciated. The Nikkei 225 Index shed 2.7%. Chinese onshore shares rose for most of the week but fell sharply on Friday as trade data for February came in weaker than expected. The Shanghai Stock Exchange Composite Index finished the week down 0.8%. The Indian market outperformed, with the SENSEX 30 Index gaining 1.7% amid easing geopolitical tensions and firm activity data.

US Treasury yields fell (prices rose) amid investor risk aversion on the back of growth concerns and some disappointing economic data releases and as the ECB cut its growth and inflation forecasts, also announcing further rounds of cheap loans to the banking sector. Yields fell across the curve, with two-year yields declining 9 bps to 2.46% and 10-year yields declining 12 bps to 2.63%.

Core European government bond yields also rallied on the back of the ECB meeting. Benchmark German 10-year bund yields declined 12 bps to 0.07%, touching their lowest level since October 2016. Italian bonds outperformed (10-year yields down 23 bps) as the ECB’s new TLTRO programme is likely to benefit the region’s banks the most, given the extent of loan uptake in the current programme.

Brent crude oil prices were little changed amid subdued risk appetite and data showing a much larger than expected build in US crude inventories last week, with positive sentiment on the back of US-China trade talks. Overall, Brent appreciated 0.9% to USD65.7 a barrel. Meanwhile, gold prices were also little changed (+0.4% to USD1,298 per troy ounce), despite a stronger US dollar.