July 2021

• Global markets advanced in July as strong corporate earnings and continued economic reopening supported investor confidence despite concerns surrounding the Delta coronavirus variant.
• Technology and growth stocks outperformed as bond yields declined during the month.
• Central banks maintained broadly accommodative policies while continuing to monitor rising inflation pressures.
• European and U.S. consumer activity remained strong as restrictions eased further.
• Emerging markets delivered mixed performance due to renewed virus outbreaks and regulatory developments in China.
• Commodity prices remained elevated, though volatility increased in energy markets.

Asia (ex. Japan)

Asian markets outside Japan experienced mixed performance during July as investors balanced strong export demand and economic recovery against renewed coronavirus outbreaks and increasing regulatory intervention in China’s technology and education sectors.

Chinese equities came under pressure following government actions aimed at tightening oversight of major industries, while Taiwan and South Korea remained supported by continued global semiconductor demand.

Europe

European equities advanced during July as strong corporate earnings and continued reopening momentum supported investor sentiment. Consumer-facing sectors, industrials and luxury goods companies benefited from improving domestic and international demand.

Although concerns regarding the Delta variant increased later in the month, accommodative monetary policy and improving vaccination coverage helped maintain confidence in the broader recovery outlook.

United States

U.S. equities reached additional record highs during July as corporate earnings significantly exceeded expectations and technology companies regained market leadership amid declining Treasury yields.

Economic activity remained robust, supported by strong consumer spending and improving labour market conditions. The Federal Reserve maintained its accommodative stance while acknowledging continued progress toward recovery objectives.

United Kingdom

UK equities advanced during July as the government proceeded with the final stages of reopening despite rising Delta variant cases. Consumer spending and service sector activity strengthened significantly.

Financial and commodity sectors remained supportive for the market overall, while investors monitored inflation developments and labour market recovery trends closely.

Japan

Japanese equities delivered mixed performance during July as exporters benefited from strong global demand, though domestic virus concerns and state-of-emergency measures weighed on local sentiment.

The Tokyo Olympics proceeded under strict restrictions, while the Bank of Japan maintained highly accommodative monetary policies to support economic recovery.

Emerging Markets

Emerging markets experienced mixed performance during July as renewed virus outbreaks, rising dollar strength and Chinese regulatory actions created volatility across several regions.

Asian markets faced the greatest pressure due to developments in China, while commodity-exporting economies remained supported by elevated energy and metals prices.

Commodities

Commodity prices remained elevated during July though volatility increased across energy markets. Oil prices fluctuated as investors weighed strong demand recovery against concerns regarding renewed virus outbreaks and supply adjustments by major producers.

Industrial metals remained supported by infrastructure spending expectations and manufacturing activity, while gold prices stabilised amid declining bond yields and ongoing inflation concerns.