August 2017

• Global markets experienced increased volatility in August due to geopolitical tensions involving North Korea and political uncertainty in the United States.
• Despite volatility, global equities remained relatively resilient overall.
• Technology and export-oriented sectors continued supporting market performance.
• Safe-haven assets such as gold and government bonds gained during periods of tension.
• Emerging markets remained relatively strong due to dollar weakness and improving trade conditions.
• Oil prices remained supported by expectations of tightening supply.

Asia (ex. Japan)

Asian markets outside Japan experienced increased volatility during August due to heightened geopolitical tensions surrounding North Korea. However, regional markets remained relatively resilient due to strong export demand and stable economic growth.

China continued maintaining stable growth conditions through targeted policy support, while South Korea’s market recovered from early-month weakness as investors remained confident in economic fundamentals.

Europe

European equities were relatively stable in August despite geopolitical concerns and currency strength. Economic indicators continued supporting the view of broad eurozone recovery.

The stronger euro weighed slightly on exporters, though improving domestic demand and manufacturing activity continued underpinning investor sentiment.

United States

U.S. equities experienced modest volatility in August due to geopolitical risks and domestic political uncertainty. However, strong corporate earnings and economic data helped limit downside pressure.

Inflation remained subdued, leading investors to question the pace of future Federal Reserve tightening. Treasury yields declined modestly as investors sought safety during periods of volatility.

United Kingdom

UK equities remained broadly stable during August, though sterling fluctuations continued influencing multinational exporters. Domestic consumer activity remained under pressure from rising inflation.

The Bank of England maintained a cautious stance while monitoring inflation developments and Brexit-related economic uncertainty.

Japan

Japanese equities experienced moderate volatility as geopolitical tensions affected investor sentiment and strengthened the yen temporarily.

Despite this, strong export demand and accommodative monetary policy continued supporting broader market conditions.

Emerging Markets

Emerging markets remained resilient in August despite geopolitical volatility. A weaker U.S. dollar and improving global trade conditions continued supporting investor inflows.

Asian emerging markets outperformed due to technology demand and stable growth, while commodity exporters benefited from firm industrial metals prices.

Commodities

Commodity markets were relatively stable in August. Oil prices remained supported by expectations of tightening supply and improving demand conditions.

Gold prices rose due to increased geopolitical tensions, while industrial metals remained firm on strong Chinese and global manufacturing demand.