The persistent sell-off in the equity markets took a breather last week, with the S&P 500 increasing 6.6%, following seven consecutive weekly declines. Investors seem to have been comforted by the belief that the very slightly weaker eco-nomic data that we have recently seen will cause the Fed to pare back its planned rate increases. This view has also been supported by the continued decline in longer-term T-note yields, which have fallen from 3.13% during the first week of May to 2.74% today. At the short end of the curve, funds rate expectations via the futures market show that participant snow expect to see a peak rate of just 2.95% in July 2023,which is down from an earlier expected funds peak of 3.46%during April. These declining yields and expected rates have also led to the continued rolling over of the dollar, with the DXY index now 3.3% lower than just two weeks ago. This has come against the ECB at least attempting to sound a little more hawkish, with some board members even talking about raising rates by 50 basis points in July. Unfortunately, where we have not yet seen much relief has been in commodity prices, with WTI oil back up to$116.07/bl, and CRB core commodities back up to the highest reading since 2012. Meanwhile, the U.S. national average price of gasoline reached a high of $4.61 per gallon last week, which will result in another hit to consumer confidence and discretionary consumer spending. Finally, with bonds rallying and crytocurrencies still plunging, gold has perked up again, rising to $1861.95—an improve-ment, but still far below the March peak of $2050.76.Overall investor sentiment remains extremely low, as the chart below highlights
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