June 2021

• Global markets advanced in June as strong economic growth and corporate earnings continued supporting investor sentiment despite ongoing inflation concerns.
• The Federal Reserve signalled that interest rate increases could occur sooner than previously expected, creating temporary market volatility.
• Technology stocks recovered strongly late in the month as bond yields stabilised.
• European and U.S. economies continued reopening steadily, boosting cyclical sectors and consumer activity.
• Emerging markets experienced mixed performance amid shifting monetary policy expectations and uneven recovery trends.
• Commodity prices remained elevated due to strong demand and ongoing supply constraints.

Asia (ex. Japan)

Asian markets outside Japan delivered mixed results during June as strong export growth and manufacturing activity supported economic conditions, while concerns regarding tighter U.S. monetary policy created volatility across regional markets.

China’s economic growth remained robust overall, though authorities continued introducing measures aimed at managing credit growth and moderating commodity price inflation. Technology exporters such as Taiwan and South Korea remained supported by strong semiconductor demand.

Europe

European equities advanced during June as reopening momentum accelerated across the region and economic data continued improving steadily. Consumer, industrial and financial sectors benefited from stronger domestic demand and rising business confidence.

The European Central Bank maintained highly accommodative policies while emphasising that inflation pressures were expected to remain temporary despite rising prices across several sectors.

United States

U.S. equities reached further record highs during June as strong earnings growth and continued economic reopening supported investor optimism. Technology stocks recovered strongly late in the month following earlier weakness linked to rising bond yields.

The Federal Reserve surprised markets slightly by signalling that future interest rate increases could occur earlier than previously expected due to stronger inflation and growth conditions. However, broader financial conditions remained highly supportive overall.

United Kingdom

UK equities delivered solid gains during June as reopening activity and strong consumer spending supported economic recovery momentum.

However, concerns regarding the spread of the Delta coronavirus variant created some uncertainty surrounding the pace of further reopening measures, while inflation data continued trending higher.

Japan

Japanese equities experienced relatively stable performance during June as exporters benefited from strong global demand and improving manufacturing conditions.

Domestic economic activity remained constrained somewhat by slower vaccination progress and continued pandemic-related restrictions, though supportive monetary policy helped maintain stable financial conditions.

Emerging Markets

Emerging markets delivered mixed performance during June as investors responded to changing Federal Reserve guidance and fluctuating global bond yields.

Commodity-exporting countries remained supported by elevated energy and metals prices, while some Asian economies benefited from strong export demand despite renewed virus outbreaks in parts of the region.

Commodities

Commodity prices remained elevated during June as global economic recovery and infrastructure spending expectations supported demand. Oil prices continued rising due to strong mobility recovery and disciplined supply management among major producers.

Industrial metals remained near historic highs despite some moderation following earlier rallies, while gold prices weakened after the Federal Reserve’s more hawkish policy signals strengthened the U.S. dollar temporarily.