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Risk assets endured a difficult week last week contending with an initial further move higher in global bond yields, hawkish comments from Federal Reserve Chairman Jerome Powell, and at the end of the week, weakness in the banking sector caused by uncertainty over the solvency position of US venture capital funding bank Silicon Valley Bank. The combination of all these factors resulted in average declines of circa 3.2% for global equity markets. In our recent Weekly Trader and Daily Note commentaries we have been highlighting the headwind that rising bond yields, as a result of a repricing higher for central bank terminal rates, were posing for risk assets. In the first part of last week this continued to be the case as core bond yields moved to multi-month highs. This move higher in yields continued to be driven by the recent higher-than-expected global inflation data, but was exacerbated by a more hawkish than expected tone from Fed Chair Jerome Powell during his semi-annual testimony to the US Senate Banking Committee. During his testimony, Chair Powell stated that the Fed is prepared to speed up the pace of rate increases if data indicates that a faster pace of tightening is warranted and that the ultimate level of interest rates may be higher than previously expected.