February 2018

• Global markets experienced a sharp increase in volatility during February 2018 as inflation concerns and rising bond yields unsettled investors.
• Equity markets corrected after a prolonged period of exceptionally low volatility.
• U.S. Treasury yields rose significantly amid concerns over faster inflation and Federal Reserve tightening.
• Technology and growth stocks experienced increased volatility globally.
• Emerging markets remained relatively resilient despite market turbulence.
• Commodity prices softened modestly alongside risk appetite.

Asia (ex. Japan)

Asian markets outside Japan declined during February as global volatility increased sharply following rising U.S. bond yields. Technology-heavy markets such as South Korea and Taiwan experienced heightened swings alongside global equity corrections.

Chinese equities weakened modestly despite stable domestic growth conditions, while India remained relatively resilient due to strong domestic demand and improving corporate earnings expectations.

Europe

European equities experienced increased volatility in February as rising global bond yields and inflation concerns weighed on investor sentiment. Financials benefited somewhat from higher yields, though broader equity markets corrected.

Economic conditions remained supportive overall, but investors became more cautious regarding central bank tightening and higher financing costs.

United States

U.S. equities experienced one of their sharpest corrections in years during February as inflation fears triggered a rapid rise in Treasury yields and increased volatility across markets.

Despite market turbulence, economic fundamentals remained strong. Employment growth accelerated and wage growth improved, reinforcing expectations for further Federal Reserve tightening.

United Kingdom

UK equities declined modestly during February as rising global volatility and bond yields weighed on sentiment. Commodity and financial sectors experienced notable fluctuations.

The Bank of England maintained expectations for gradual tightening while monitoring inflation and Brexit-related developments closely.

Japan

Japanese equities fell sharply in February as global volatility increased and the yen strengthened during periods of risk aversion.

Exporters came under pressure from currency appreciation, though strong corporate earnings and supportive monetary policy helped limit broader declines.

Emerging Markets

Emerging markets declined during February but generally outperformed developed peers as investors remained relatively confident regarding global growth prospects.

Asian emerging markets remained supported by export growth, while commodity exporters faced pressure from softer commodity prices and stronger global bond yields.

Commodities

Commodity prices weakened modestly during February as global risk appetite declined and financial market volatility increased.

Oil prices retreated from recent highs, while industrial metals softened amid concerns about tighter financial conditions globally.