June 2023

• Global markets advanced in June as artificial intelligence optimism, resilient economic data and easing recession fears supported investor sentiment.
• Technology stocks continued leading gains globally, particularly within semiconductor and software sectors.
• Central banks maintained restrictive policy stances, though investors increasingly anticipated that interest rates were nearing peak levels.
• Economic activity remained more resilient than expected across major developed economies.
• Emerging markets delivered mixed performance amid uneven Chinese recovery conditions and shifting global capital flows.
• Commodity prices remained relatively subdued due to slowing manufacturing activity and weaker Chinese demand.

Asia (ex. Japan)

Asian markets outside Japan delivered mixed performance during June as investors balanced strong technology sector momentum against concerns regarding slowing Chinese economic growth and weak property market conditions.

Taiwan and South Korea benefited significantly from continued enthusiasm surrounding artificial intelligence and semiconductor demand, while broader regional sentiment remained cautious due to soft Chinese manufacturing data.

Europe

European equities advanced modestly during June as recession fears eased and economic activity remained more resilient than previously expected despite higher interest rates.

The European Central Bank continued raising interest rates in response to persistent inflation, while investors focused increasingly on the outlook for future policy tightening and economic growth.

United States

U.S. equities delivered strong gains during June as technology companies continued benefiting from investor enthusiasm surrounding artificial intelligence and resilient corporate earnings.

Economic data remained relatively supportive overall, with labour markets and consumer spending proving stronger than anticipated despite restrictive Federal Reserve policies.

United Kingdom

UK equities experienced relatively subdued performance during June as inflation remained stubbornly high and the Bank of England accelerated interest rate increases.

Higher borrowing costs and slowing consumer activity increased concerns regarding domestic economic growth and housing market conditions.

Japan

Japanese equities continued outperforming during June as foreign investor inflows remained strong and accommodative Bank of Japan policies supported market sentiment.

Exporters benefited from weaker yen conditions, while corporate governance reforms and improving profitability trends attracted additional international investment.

Emerging Markets

Emerging markets delivered mixed results during June as technology-oriented Asian economies benefited from semiconductor demand while weaker Chinese growth weighed on broader sentiment.

Commodity-exporting countries faced softer raw material prices and slower global manufacturing activity, though financial conditions remained relatively stable overall.

Commodities

Commodity prices remained relatively weak during June as slowing manufacturing activity and disappointing Chinese demand offset resilient developed market economic conditions. Oil prices traded within a relatively narrow range amid balanced supply and demand expectations.

Industrial metals remained under pressure due to soft Chinese construction and property sector activity, while gold prices weakened modestly amid resilient economic data and elevated interest rates.