May 2020

• Global markets continued recovering in May as lockdown restrictions eased gradually across many economies and unprecedented stimulus measures supported investor confidence.
• Equity markets rallied strongly despite ongoing economic weakness and elevated unemployment levels.
• Technology and healthcare sectors remained major outperformers as digital adoption accelerated during the pandemic.
• Central banks maintained highly accommodative policies and expanded support programmes where necessary.
• Emerging markets benefited from improving global liquidity conditions and recovering risk appetite.
• Oil prices rebounded sharply from April’s historic lows as production cuts and reopening optimism improved demand expectations.

Asia (ex. Japan)

Asian markets outside Japan advanced strongly during May as economies gradually reopened following earlier lockdowns and investors responded positively to improving economic activity in China. Manufacturing and industrial production data showed early signs of recovery across parts of the region.

Technology-focused economies such as Taiwan and South Korea continued outperforming due to strong demand for semiconductors, digital infrastructure and consumer electronics. China also benefited from extensive fiscal and monetary support measures aimed at stabilising growth.

Europe

European equities rallied during May as governments eased lockdown restrictions and investors became increasingly optimistic regarding economic reopening prospects. Massive fiscal support measures and continued European Central Bank stimulus supported financial conditions across the region.

Economic data remained extremely weak overall, particularly within travel, hospitality and retail sectors, though investors increasingly focused on recovery expectations for the second half of the year.

United States

U.S. equities continued rebounding strongly during May as investors responded positively to reopening plans, extensive Federal Reserve support and improving liquidity conditions. Technology companies remained key drivers of market gains.

Economic indicators remained historically weak, with unemployment still elevated and business activity significantly disrupted. However, signs of stabilisation in consumer spending and manufacturing sentiment improved market confidence.

United Kingdom

UK equities advanced during May as lockdown restrictions began easing gradually and investor sentiment improved alongside global markets. The Bank of England maintained aggressive support measures to stabilise financial conditions and support lending.

Despite improving market conditions, economic activity remained heavily affected by the pandemic, particularly within hospitality, aviation and retail sectors.

Japan

Japanese equities continued recovering during May as improving global risk appetite and supportive domestic stimulus measures boosted investor confidence.

The Bank of Japan maintained extensive asset purchases and liquidity support, while exporters benefited from improving conditions in China and stabilising global supply chains.

Emerging Markets

Emerging markets performed strongly during May as improving global liquidity conditions, weaker dollar trends and reopening optimism encouraged capital inflows into higher-risk assets.

Asian economies outperformed due to stronger virus containment and technology sector exposure, while commodity exporters benefited from recovering energy and industrial metals prices.

Commodities

Commodity prices rebounded strongly during May as economies gradually reopened and investor sentiment improved significantly from March and April lows. Oil prices recovered sharply following coordinated production cuts and improving demand expectations.

Industrial metals also advanced due to recovering Chinese manufacturing activity and infrastructure spending, while gold prices remained elevated amid ongoing economic uncertainty and aggressive monetary stimulus.