August 2023

• Global markets experienced increased volatility in August as rising bond yields and concerns regarding slowing Chinese growth weighed on investor sentiment.
• Technology stocks faced temporary pressure despite continued long-term optimism surrounding artificial intelligence.
• Central banks maintained restrictive policy guidance as inflation remained above target levels.
• Chinese property sector weakness intensified concerns regarding global economic growth and commodity demand.
• Bond yields reached multi-year highs across several major developed economies.
• Commodity prices delivered mixed performance amid slowing Chinese demand and tighter energy markets.

Asia (ex. Japan)

Asian markets outside Japan weakened during August as concerns regarding slowing Chinese growth and worsening property sector conditions intensified across the region.

Chinese authorities introduced targeted support measures for the economy and financial markets, though investor confidence remained fragile due to weak consumer demand and ongoing property market stress.

Europe

European equities delivered mixed performance during August as higher bond yields and slowing Chinese demand created pressure for industrial and export-oriented sectors.

Inflation remained elevated across parts of Europe despite signs of economic slowdown, keeping expectations intact for continued restrictive European Central Bank policies.

United States

U.S. equities experienced increased volatility during August as Treasury yields climbed to multi-year highs and investors reassessed valuations following strong gains earlier in the year.

Technology stocks came under temporary pressure, though enthusiasm surrounding artificial intelligence and resilient corporate earnings helped limit broader market weakness.

United Kingdom

UK equities delivered relatively subdued performance during August as higher interest rates and slowing domestic economic activity weighed on investor sentiment.

Persistent inflation and elevated borrowing costs continued creating pressure for consumers and housing markets, though energy and commodity sectors remained relatively supportive.

Japan

Japanese equities remained relatively resilient during August as weaker yen conditions supported exporters and corporate earnings.

However, rising global bond yields and concerns regarding slowing Chinese demand created increased volatility across manufacturing and industrial sectors.

Emerging Markets

Emerging markets weakened during August as stronger U.S. dollar conditions, rising global bond yields and Chinese growth concerns reduced investor appetite for higher-risk assets.

Commodity-exporting economies faced softer demand expectations, while Asian markets were particularly affected by property sector weakness in China.

Commodities

Commodity prices delivered mixed results during August. Oil prices remained supported by production cuts and tighter supply conditions despite concerns regarding slowing global demand.

Industrial metals weakened due to deteriorating Chinese property market conditions and slower manufacturing activity, while gold prices faced pressure from rising real yields and stronger dollar conditions.