July 2019

• Global markets advanced in July as major central banks moved closer toward monetary easing and investor confidence remained broadly supportive.
• The Federal Reserve cut interest rates for the first time since the financial crisis, reinforcing expectations for a prolonged accommodative policy environment.
• U.S. equities reached new record highs, led by technology and consumer sectors.
• European and Asian markets were supported by lower bond yields and improving liquidity conditions.
• Emerging markets remained resilient despite renewed trade-related uncertainty late in the month.
• Commodity prices were mixed, with oil remaining volatile while gold continued strengthening.

Asia (ex. Japan)

Asian markets outside Japan delivered positive performance during July as expectations for easier global monetary policy supported investor sentiment across the region. Chinese authorities maintained targeted stimulus measures aimed at supporting domestic demand and stabilising manufacturing activity.

Technology exporters such as Taiwan and South Korea benefited from recovering semiconductor sentiment and lower global bond yields, while India advanced following additional domestic monetary easing and improving liquidity conditions.

Europe

European equities advanced during July as investors anticipated additional monetary stimulus from the European Central Bank. Falling bond yields and supportive liquidity conditions helped offset continued weakness within manufacturing sectors.

Economic indicators remained relatively subdued across the eurozone, particularly in Germany’s industrial sector, though markets remained supported by expectations of prolonged accommodative policy.

United States

U.S. equities reached fresh record highs during July as the Federal Reserve cut interest rates by 0.25%, marking its first rate reduction since 2008. Investors welcomed the move as supportive for economic expansion and financial conditions.

Corporate earnings remained broadly supportive despite slower growth expectations, while employment and consumer spending continued underpinning economic resilience. Treasury yields remained near multi-year lows throughout the month.

United Kingdom

UK equities delivered modest gains during July as improving global market sentiment helped offset continued Brexit uncertainty. Boris Johnson became Prime Minister during the month, increasing political focus on the possibility of a no-deal Brexit scenario.

Sterling weakened notably following the leadership transition, while business investment conditions remained subdued amid ongoing uncertainty surrounding future trade arrangements.

Japan

Japanese equities advanced modestly during July as lower global bond yields and supportive monetary conditions improved investor sentiment. Exporters benefited from stable currency conditions for much of the month.

The Bank of Japan maintained its accommodative policy framework while acknowledging increased downside risks from slowing global trade and manufacturing activity.

Emerging Markets

Emerging markets remained relatively resilient during July as lower U.S. interest rates and weaker dollar conditions supported capital flows and investor appetite for risk assets.

Asian markets continued benefiting from Chinese stimulus measures and improving technology sector sentiment, while commodity exporters experienced more mixed conditions due to fluctuating oil prices.

Commodities

Commodity markets delivered mixed performance during July. Oil prices remained volatile as geopolitical tensions and supply concerns balanced against weaker global demand expectations.

Gold prices continued rallying strongly as falling bond yields and increasing expectations for monetary easing boosted safe-haven demand. Industrial metals remained relatively stable amid ongoing trade negotiations.