Introduction
Global equity markets advanced over March 2023 but experienced periods of volatility. Investor confidence was frayed after the failures of Silicon Valley Bank (“SVB”) and Credit Suisse Group AG. In response, equity markets fell as concerns about contagion mounted and the rising possibility these failures could push the global economy into a recession. However, regulators, central banks and governments took swift action to help resolve the issue and ensure faith in the global banking system would be restored.
Several central banks held meetings during the month. The Bank of Canada (“BoC”) paused, a move market participants widely expected after comments by BoC officials at their last meeting. The U.S. Federal Reserve Board implemented a 25-basis-point (“bps”) increase, taking the target range of its federal funds rate to 4.75%-5.00%. The European Central Bank (“ECB”) and Bank of England (“BoE”) also raised rates. Economic activity was relatively stable during the month, with some countries and regions seeing an uptick in manufacturing and service sector activity.
The S&P/TSX Composite Index posted a slight loss, dragged down by the Health Care sector. In the U.S., the S&P 500 Index finished higher, led by the Information Technology sector. Yields on 10-year bonds in Canada and the U.S. declined over the month. The price of gold advanced amid uncertain economic conditions, while oil prices posted a negative return.
