February 2021

• Global markets advanced further in February as vaccine rollouts accelerated and investors increasingly anticipated strong economic reopening and recovery.
• Bond yields rose sharply during the month as inflation expectations increased alongside improving growth forecasts.
• Cyclical and value-oriented sectors significantly outperformed technology and growth stocks.
• Central banks maintained accommodative policies despite rising inflation concerns.
• Emerging markets experienced mixed performance due to higher U.S. bond yields and dollar strength.
• Commodity prices surged, particularly oil and industrial metals, amid expectations for stronger global demand.

Asia (ex. Japan)

Asian markets outside Japan delivered mixed performance during February as stronger global growth expectations supported exporters and commodity producers, while rising U.S. bond yields pressured higher-valuation technology sectors.

Chinese economic activity remained robust, supported by strong exports and manufacturing demand, though authorities began signalling gradual policy normalisation following the earlier pandemic stimulus measures.

Europe

European equities performed strongly during February as rising bond yields and reopening optimism boosted financial, industrial and energy sectors. Investors increasingly focused on recovery prospects for the second half of the year.

Vaccine rollout programmes accelerated gradually across Europe, while the European Central Bank maintained highly accommodative monetary policy despite rising inflation expectations globally.

United States

U.S. equities continued advancing during February as expectations for large-scale fiscal stimulus and rapid economic reopening strengthened investor confidence. Financials, industrials and energy sectors outperformed significantly.

However, technology and growth stocks experienced increased volatility as Treasury yields rose sharply. Investors increasingly rotated toward cyclical sectors expected to benefit most from economic recovery and infrastructure spending.

United Kingdom

UK equities outperformed many developed markets during February as successful vaccine rollout progress improved reopening expectations and supported cyclical sectors such as banks, energy and travel-related companies.

Investor confidence strengthened as the government outlined plans for gradually easing lockdown restrictions during the coming months.

Japan

Japanese equities advanced strongly during February as exporters benefited from rising global demand expectations and improving manufacturing conditions.

Financial and industrial sectors also performed well amid rising bond yields and reopening optimism, while the Bank of Japan maintained supportive monetary conditions.

Emerging Markets

Emerging markets delivered mixed results during February as improving global growth conditions supported commodity exporters, though rising U.S. Treasury yields created headwinds for capital flows and currencies.

Asian economies remained relatively resilient due to strong export demand and technology exposure, while Latin American markets benefited from higher commodity prices.

Commodities

Commodity prices surged during February as investors anticipated strong global economic recovery and increased infrastructure spending. Oil prices rose sharply due to improving demand expectations and continued supply discipline.

Industrial metals, including copper and aluminium, reached multi-year highs due to strong Chinese demand and optimism surrounding global manufacturing recovery, while gold prices weakened further as bond yields increased.