Introduction
Global equity markets moved higher over the month of February. Investors held largely positive sentiment towards riskier assets based on expectations that central banks might begin lowering interest rates later this year and that the global economy could avoid a recession. The Bank of Canada (“BoC”) and U.S. Federal Reserve Board (“Fed”) did not hold meetings in February, but comments from officials at both central banks pointed to rates staying higher for longer. As reported in February, inflationary pressures around the world continued to soften in January, raising hopes that central banks could soon begin lowering interest rates. Global business activity, represented by manufacturing and services sector activity, was relatively muted over the month, suggesting that demand remains soft amid tight financial conditions.
In Canada, the S&P/TSX Composite Index advanced over February, benefiting from the strong performance of the Health Care sector. Canada’s main index hit a new record high over the month. U.S. equities also rose over the month, reaching new highs. Yields on 10-year government bonds in Canada and the U.S. rose over the month. Oil and gold prices advanced.
