On the surface, last week appeared quite sedate in markets as global equities, measured by MSCI ACWI rose +0.16% in GBP terms. This was led by UK and Japanese Equities, while the US markets sold off slightly.

Beneath the surface however, there have been important movements in other parts of financial markets. Global and Sterling-denominated Fixed Income sold off quite significantly, in what has been described as a Bund Tantrum. US and German yield curves steepened over the course of the last week, as the German 25 and 30 year Bund moved out of negative territory. These moves were driven by a combination of decreased anxiety over the ongoing trade war between the US and China, and the statements by Mario Draghi that the European Central Bank is running out of tools to combat economic malaise and fiscal policy needs to do more to stimulate growth.

On the back of this increase in global rates, equity markets witnessed tectonic shifts of their own. Stocks that exhibit high momentum, or in other words the tendency for stocks that have recently done well to continue doing well, sold off heavily. Conversely, value (or cheap) stocks outperformed their peers.

The weekend brought additional market-moving headlines, in the form of a large-scale attack on Saudi Arabia’s oil production facilities which cut the country’s output in half. This sent the price of oil rocketing by +20%, which was the largest jump since the 1990 invasion of Kuwait.