March 2017

• Global markets continued to advance in March 2017 as economic growth indicators strengthened and corporate earnings remained supportive.
• The Federal Reserve raised interest rates for the first time in 2017 but maintained a gradual policy outlook, calming investors.
• European markets benefited from improving economic confidence and reduced political uncertainty.
• Emerging markets remained resilient despite higher U.S. interest rates.
• Oil prices weakened modestly due to renewed oversupply concerns.
• Bond markets remained relatively stable as investors interpreted central bank tightening as measured and controlled.

Asia (ex. Japan)

Asian markets outside Japan delivered positive returns in March as improving global demand and stable Chinese growth supported sentiment. China continued to balance financial stability with growth support through targeted policy measures.

Technology-driven markets such as Taiwan and South Korea continued to benefit from strong semiconductor demand. India also advanced as investors remained optimistic regarding structural reforms and domestic consumption trends.

Europe

European equities moved higher as economic data continued to improve and concerns over populist political risks eased ahead of key elections. Business confidence and manufacturing indicators remained strong throughout the eurozone.

The European Central Bank maintained supportive policy settings while acknowledging stronger economic momentum. The euro strengthened modestly against major currencies as investor confidence improved.

United States

U.S. equities remained resilient despite the Federal Reserve raising interest rates by 0.25%. Investors welcomed the Fed’s cautious tone regarding future tightening, interpreting policy normalisation as supportive of economic growth.

Employment conditions remained robust, while consumer spending and manufacturing activity continued to support expansion. Treasury yields remained relatively contained following the rate decision.

United Kingdom

UK equities were mixed during March as Brexit-related uncertainty continued to influence domestic sentiment. Sterling remained volatile following the formal triggering of Article 50 to begin the UK’s withdrawal process from the European Union.

Despite political uncertainty, domestic economic conditions remained relatively stable. Inflation continued to rise gradually, while the Bank of England maintained an accommodative monetary stance.

Japan

Japanese equities advanced as improving global trade and stable currency conditions supported exporters. Corporate earnings expectations strengthened further due to stronger external demand.

The Bank of Japan maintained its accommodative policy framework, reinforcing supportive financing conditions. Investor confidence remained constructive amid improving global economic momentum.

Emerging Markets

Emerging markets remained strong in March despite higher U.S. interest rates, as investors were reassured by the Federal Reserve’s gradual tightening approach. Commodity prices and capital flows remained supportive overall.

Asian emerging markets outperformed due to technology demand and stable growth conditions, while Latin American markets benefited from recovering investor confidence and improving commodities.

Commodities

Commodity markets were mixed in March. Oil prices weakened modestly as investors became concerned about rising U.S. shale production and persistent oversupply despite OPEC cuts.

Industrial metals remained supported by strong manufacturing activity globally, while gold prices strengthened slightly following the Federal Reserve’s measured tone on policy tightening.