December 2018

• Global markets suffered severe declines in December 2018 as fears of slowing global growth and tighter monetary policy triggered widespread risk aversion.
• U.S. equities experienced one of their worst Decembers since the financial crisis.
• Central bank tightening and trade tensions weighed heavily on investor sentiment.
• Oil prices declined further amid demand concerns.
• Safe-haven assets such as government bonds and gold outperformed.
• Volatility surged across global financial markets heading into 2019.

Asia (ex. Japan)

Asian markets outside Japan declined sharply during December as slowing Chinese growth, trade tensions and global risk aversion pressured investor sentiment.

Technology exporters experienced significant weakness due to concerns regarding slowing demand and tightening financial conditions globally.

Europe

European equities weakened substantially during December as growth concerns intensified and political uncertainty remained elevated across the region.

Economic indicators softened notably, reinforcing fears of slowing global momentum.

United States

U.S. equities fell sharply during December as investors worried that Federal Reserve tightening could further slow economic growth.

The Federal Reserve raised interest rates again but later signalled greater flexibility amid worsening financial conditions and rising volatility.

United Kingdom

UK equities declined during December as Brexit uncertainty and global market weakness weighed heavily on investor confidence.

Sterling remained volatile amid continued political uncertainty surrounding the Brexit process.

Japan

Japanese equities fell sharply during December due to global growth concerns and heightened risk aversion.

The stronger yen during periods of market stress further pressured exporters and corporate earnings expectations.

Emerging Markets

Emerging markets declined significantly during December as investors reduced exposure to risk assets amid fears of slowing global growth and tighter liquidity conditions.

However, easing U.S. dollar strength helped stabilise some emerging market currencies late in the month.

Commodities

Commodity prices weakened further during December. Oil prices declined sharply due to concerns over slowing global demand and persistent oversupply.

Industrial metals remained under pressure, while gold prices benefited from safe-haven demand amid rising financial market volatility.