March 2021

• Global markets remained broadly positive in March as vaccine rollouts accelerated and economic reopening expectations strengthened further.
• Rising bond yields continued driving rotation from technology and growth stocks into cyclical and value-oriented sectors.
• Central banks maintained accommodative monetary policies despite increasing inflation expectations.
• U.S. fiscal stimulus measures boosted optimism regarding global growth prospects.
• Emerging markets experienced mixed performance amid higher Treasury yields and fluctuating capital flows.
• Commodity prices remained strong due to robust recovery expectations and supply constraints.

Asia (ex. Japan)

Asian markets outside Japan delivered mixed performance during March as strong export growth and recovering global demand supported manufacturing economies, while rising U.S. Treasury yields pressured technology-related sectors.

Chinese authorities continued gradually reducing some emergency stimulus measures introduced during the pandemic, leading to occasional volatility in domestic equity markets. Semiconductor demand remained highly supportive for Taiwan and South Korea.

Europe

European equities advanced during March as accelerating vaccination programmes and improving economic reopening expectations supported cyclical sectors such as banking, industrials and energy.

Although several countries continued facing virus-related restrictions, investors increasingly focused on the anticipated recovery in consumer spending and business activity later in the year.

United States

U.S. equities reached further record highs during March as the approval of a massive fiscal stimulus package strengthened expectations for rapid economic recovery and rising consumer demand.

Technology sectors experienced increased volatility as Treasury yields continued rising, while financials, industrials and energy sectors significantly outperformed amid improving growth and inflation expectations.

United Kingdom

UK equities performed strongly during March as successful vaccine distribution and reopening plans improved confidence regarding economic recovery prospects.

Financial and commodity-related sectors benefited from rising bond yields and stronger global growth expectations, while sterling remained relatively firm.

Japan

Japanese equities advanced during March as exporters benefited from improving global manufacturing activity and stronger demand expectations across Asia and the United States.

The Bank of Japan adjusted elements of its policy framework slightly while maintaining overall accommodative monetary conditions to support recovery momentum.

Emerging Markets

Emerging markets delivered mixed performance during March as higher U.S. Treasury yields and stronger dollar conditions created volatility across several economies.

Commodity-exporting countries benefited from rising energy and metals prices, while Asian economies remained supported by robust export growth and technology demand.

Commodities

Commodity prices remained elevated during March as investors anticipated strong global recovery and infrastructure spending. Oil prices continued benefiting from improving demand expectations and controlled supply conditions.

Industrial metals remained near multi-year highs due to strong Chinese demand and manufacturing recovery, while gold prices stabilised somewhat following earlier weakness linked to rising bond yields.