May 2017

• Global markets advanced in May as political uncertainty in Europe eased further and economic data remained strong across major economies.
• European equities outperformed following Emmanuel Macron’s victory in the French presidential election.
• U.S. markets continued to reach record highs despite brief political volatility in Washington.
• Emerging markets benefited from improving trade conditions and stable commodity prices.
• Central banks maintained broadly accommodative policies despite strengthening economic growth.
• Oil prices remained volatile amid ongoing concerns over global supply levels.

Asia (ex. Japan)

Asian markets outside Japan continued to perform strongly in May as technology stocks and export-oriented sectors benefited from improving global demand. Chinese equities stabilised after earlier weakness, supported by targeted liquidity measures and continued infrastructure investment.

India remained resilient as reform momentum and strong domestic demand supported investor confidence. South Korea also advanced strongly amid improving semiconductor demand and easing political uncertainty following its presidential election.

Europe

European equities rallied in May after Emmanuel Macron’s decisive French election victory reduced fears surrounding populist political risks within the eurozone. Economic indicators continued to strengthen, particularly within manufacturing and consumer sectors.

The European Central Bank maintained accommodative policies while acknowledging improving economic momentum. Banking stocks benefited from stronger growth expectations and rising investor confidence.

United States

U.S. equities reached fresh record highs in May despite temporary political concerns surrounding the administration. Corporate earnings remained strong, while employment and manufacturing data continued to support growth expectations.

The Federal Reserve reinforced expectations for further gradual interest rate increases later in the year. Treasury yields remained relatively stable as inflation pressures stayed moderate.

United Kingdom

UK equities were relatively stable during May as Brexit negotiations and the approaching general election created political uncertainty. Sterling recovered modestly, reducing some of the currency-related benefits for exporters.

Economic growth softened slightly compared with previous quarters, though employment conditions remained supportive. The Bank of England maintained its cautious monetary stance amid ongoing uncertainty.

Japan

Japanese equities continued to advance as global trade conditions improved and corporate earnings strengthened. The yen remained relatively weak, benefiting exporters and manufacturing companies.

The Bank of Japan maintained its ultra-accommodative monetary policy stance, supporting financial markets and reinforcing investor confidence in continued stimulus.

Emerging Markets

Emerging markets outperformed again in May as investors embraced improving global growth and stable financial conditions. Commodity exporters benefited from recovering industrial demand, while Asian economies gained from strong export momentum.

Capital inflows remained supportive across emerging economies as volatility stayed subdued and the U.S. dollar weakened modestly.

Commodities

Commodity markets were mixed in May. Oil prices remained volatile despite OPEC extending production cuts, as rising U.S. shale output offset some supply restraint efforts.

Industrial metals remained strong due to improving global manufacturing activity, while gold prices traded within a narrow range amid relatively stable financial conditions.