July 2017

• Global markets continued rising in July as strong corporate earnings and improving economic data supported investor confidence.
• Technology stocks remained a major driver of equity gains globally.
• European markets benefited from improving economic momentum and stronger business confidence.
• Emerging markets outperformed developed peers amid dollar weakness.
• Oil prices recovered modestly following earlier declines.
• Central banks maintained gradual and cautious policy normalisation approaches.

Asia (ex. Japan)

Asian equities outside Japan delivered strong gains in July as export growth and technology demand remained robust. Chinese growth data exceeded expectations, supporting confidence in regional demand conditions.

South Korea and Taiwan continued benefiting from strong semiconductor exports, while India remained supported by structural reforms and stable domestic demand trends.

Europe

European equities advanced as economic indicators continued improving across the eurozone. Business confidence remained elevated, while unemployment continued declining in several countries.

The euro strengthened significantly against the U.S. dollar due to improving growth expectations and discussions surrounding eventual ECB policy normalisation.

United States

U.S. equities reached further record highs in July as earnings season exceeded expectations, particularly within technology and consumer sectors. Economic growth accelerated modestly, reinforcing investor optimism.

The Federal Reserve maintained interest rates unchanged while outlining plans to begin reducing its balance sheet later in the year. Treasury yields remained relatively stable despite ongoing growth optimism.

United Kingdom

UK equities underperformed somewhat in July as sterling strength weighed on multinational exporters. Domestic economic data remained mixed, with consumer spending slowing due to rising inflation pressures.

The Bank of England maintained interest rates unchanged but acknowledged improving global growth conditions and rising inflation concerns.

Japan

Japanese equities advanced as global trade and manufacturing conditions remained favourable. Exporters benefited from steady overseas demand despite modest yen appreciation.

The Bank of Japan maintained its highly accommodative policy stance and downgraded inflation forecasts, reinforcing expectations for prolonged monetary support.

Emerging Markets

Emerging markets performed strongly in July as dollar weakness and improving global trade supported capital inflows. Commodity-exporting countries also benefited from recovering industrial demand.

Asian economies led gains due to technology sector strength and stable macroeconomic conditions, while Latin America continued recovering gradually.

Commodities

Commodity markets improved in July, with oil prices recovering modestly as investors anticipated tighter supply conditions later in the year.

Industrial metals rallied strongly due to robust Chinese demand and improving manufacturing activity globally, while gold prices strengthened modestly on dollar weakness.