June 2017

• Global markets remained positive in June 2017 as synchronised global growth continued to support equities.
• Central banks began signalling a gradual shift away from ultra-loose monetary policy.
• Technology stocks led gains in the United States and Asia.
• European markets remained supported by improving economic momentum.
• Emerging markets benefited from continued capital inflows and stable global conditions.
• Bond yields rose modestly as investors adjusted to changing central bank rhetoric.

Asia (ex. Japan)

Asian markets outside Japan advanced during June as technology and export sectors remained strong. Chinese economic growth remained stable, supported by continued policy management and infrastructure spending.

South Korea and Taiwan benefited significantly from strong semiconductor demand, while India continued to attract investors through improving reform implementation and stable macroeconomic conditions.

Europe

European equities delivered modest gains as economic confidence continued to strengthen across the eurozone. Manufacturing and employment indicators improved further, supporting expectations for sustained recovery.

The European Central Bank hinted at the possibility of reducing monetary stimulus in the future, contributing to modest rises in sovereign bond yields and a stronger euro.

United States

U.S. equities remained strong in June, led by technology stocks and continued earnings growth. Economic indicators remained supportive, particularly within employment and manufacturing sectors.

The Federal Reserve raised interest rates again and signalled confidence in the economy despite relatively subdued inflation. Bond yields moved higher as markets adjusted to expectations for gradual policy normalisation.

United Kingdom

UK equities were mixed following the surprise outcome of the general election, which resulted in a hung parliament and increased political uncertainty surrounding Brexit negotiations.

Sterling weakened modestly, while inflation continued rising due to prior currency depreciation. The Bank of England maintained a cautious stance despite some policymakers signalling growing concern about inflation.

Japan

Japanese equities advanced modestly as improving global demand and stable currency conditions supported exporters. Corporate profitability remained strong, particularly among manufacturers.

The Bank of Japan maintained its yield curve control framework and accommodative policy settings, helping sustain favourable financing conditions.

Emerging Markets

Emerging markets remained resilient in June despite rising U.S. interest rates. Stable commodity prices, improving global trade and continued investor inflows supported performance.

Asian emerging markets continued outperforming due to technology demand and stable growth conditions, while Latin America benefited from recovering confidence and stabilising currencies.

Commodities

Commodity prices were mixed in June. Oil prices weakened due to concerns over persistent oversupply and rising U.S. shale production.

Industrial metals remained supported by strong manufacturing demand globally, while gold prices were pressured slightly by rising bond yields and central bank tightening expectations.