July 2020

• Global markets advanced further in July as massive monetary and fiscal stimulus continued supporting investor confidence despite rising coronavirus cases globally.
• Technology and growth stocks significantly outperformed broader markets as digital transformation accelerated during the pandemic.
• The U.S. dollar weakened notably, supporting emerging markets and commodity prices.
• Central banks maintained highly accommodative policies and reinforced commitments to long-term support.
• Economic data continued improving from earlier lockdown lows, though recovery remained uneven across sectors.
• Gold prices surged to record highs amid extremely low interest rates and ongoing uncertainty.

Asia (ex. Japan)

Asian markets outside Japan delivered strong gains during July as improving Chinese economic data and continued global liquidity support boosted investor sentiment. China’s manufacturing and industrial activity continued recovering steadily, helping support regional trade expectations.

Technology-heavy economies such as Taiwan and South Korea outperformed significantly due to booming semiconductor demand and strong global appetite for digital infrastructure, cloud computing and consumer electronics.

Europe

European equities advanced during July as European Union leaders agreed on a historic recovery fund aimed at supporting member states affected by the pandemic. Investors responded positively to increased fiscal coordination across the region.

Economic activity continued recovering gradually from earlier shutdowns, though travel, tourism and hospitality sectors remained under substantial pressure due to ongoing restrictions and weak international demand.

United States

U.S. equities reached new highs during July as technology companies delivered exceptionally strong earnings and investors continued embracing growth-oriented sectors benefiting from pandemic-related trends.

The Federal Reserve maintained ultra-loose monetary policy and signalled that interest rates would likely remain near zero for an extended period. Economic indicators improved further, though rising virus cases continued creating uncertainty regarding the pace of recovery.

United Kingdom

UK equities posted modest gains during July as economic reopening continued and fiscal support measures remained extensive. However, performance lagged U.S. and Asian markets due to heavier exposure to financial, energy and cyclical sectors.

Brexit negotiations also returned to focus during the month, contributing to periodic sterling volatility and investor caution regarding long-term economic prospects.

Japan

Japanese equities advanced modestly during July as exporters benefited from improving Asian demand and stabilising global trade conditions.

The Bank of Japan maintained aggressive monetary support measures while policymakers monitored the impact of renewed coronavirus outbreaks on domestic consumption and business activity.

Emerging Markets

Emerging markets performed strongly during July as weaker U.S. dollar conditions, abundant global liquidity and recovering commodity prices encouraged investor inflows.

Asian emerging markets continued outperforming due to strong technology demand and relatively successful virus containment efforts, while commodity-exporting economies benefited from improving energy and metals prices.

Commodities

Commodity prices strengthened significantly during July as improving global liquidity conditions and recovering economic activity supported demand expectations. Oil prices stabilised at higher levels following earlier recovery gains.

Industrial metals advanced strongly due to Chinese infrastructure spending and manufacturing recovery, while gold prices surged to record highs as investors sought protection against economic uncertainty, currency weakness and extremely low real interest rates.