May 2021

• Global markets were mixed in May as rising inflation concerns and supply chain disruptions increased investor uncertainty.
• Commodity prices surged further, particularly industrial metals and energy, driven by strong global demand and supply shortages.
• Technology stocks experienced renewed volatility due to rising inflation expectations and bond yield concerns.
• Central banks maintained accommodative policies while arguing that inflation pressures were likely to be temporary.
• Emerging markets delivered mixed performance amid higher inflation and uneven vaccine rollout progress.
• Economic reopening momentum remained broadly supportive for cyclical sectors globally.

Asia (ex. Japan)

Asian markets outside Japan delivered mixed performance during May as strong export demand and manufacturing activity supported growth, though inflation concerns and supply chain disruptions increased market volatility.

Chinese authorities introduced measures aimed at limiting excessive commodity price increases, while semiconductor shortages continued affecting global manufacturing sectors despite strong underlying demand.

Europe

European equities advanced during May as reopening momentum accelerated across the region following improved vaccine distribution and easing restrictions.

Financial, industrial and travel-related sectors benefited from stronger economic activity expectations, while the European Central Bank maintained supportive monetary policies despite rising inflation data.

United States

U.S. equities experienced increased volatility during May as stronger-than-expected inflation data intensified concerns regarding potential future Federal Reserve tightening. Technology and growth sectors came under pressure during periods of rising bond yields.

However, cyclical sectors such as financials, industrials and energy continued performing strongly due to robust economic growth, rising consumer spending and extensive fiscal support measures.

United Kingdom

UK equities delivered positive performance during May as economic reopening progressed successfully and consumer activity recovered strongly following earlier lockdown restrictions.

Commodity and financial sectors benefited from rising inflation expectations and stronger global growth conditions, while sterling remained relatively firm.

Japan

Japanese equities experienced mixed performance during May as exporters benefited from strong global demand, though domestic economic uncertainty and slower vaccination progress weighed on broader sentiment.

Supply chain disruptions and semiconductor shortages also created challenges for manufacturing sectors despite strong external demand conditions.

Emerging Markets

Emerging markets delivered mixed results during May as rising U.S. inflation concerns and uneven vaccine distribution created volatility across several regions.

Commodity-exporting economies benefited significantly from higher energy and metals prices, while some Asian economies remained supported by export growth and technology demand.

Commodities

Commodity prices surged further during May as global reopening, infrastructure spending expectations and supply constraints boosted demand across energy and industrial metals markets. Oil prices continued climbing due to improving mobility trends and disciplined supply management.

Industrial metals such as copper reached historic highs amid strong manufacturing demand and concerns over limited supply availability, while gold prices strengthened modestly as inflation expectations increased.