October 2017

• Global markets continued their strong performance in October as corporate earnings and economic growth remained supportive.
• Equity markets in the United States reached repeated record highs led by technology and financial sectors.
• European and Japanese markets benefited from strong export demand and improving business conditions.
• Emerging markets remained resilient despite expectations for further U.S. policy tightening.
• Oil prices advanced further amid improving demand and geopolitical tensions.
• Global volatility remained historically low throughout the month.

Asia (ex. Japan)

Asian equities outside Japan continued rising in October as export growth and technology demand remained exceptionally strong. Chinese markets were stable ahead of the Communist Party Congress, with policymakers emphasising financial stability and sustainable growth.

South Korea and Taiwan remained among the strongest-performing markets due to continued semiconductor demand. India also advanced as economic growth expectations improved following earlier reform disruptions.

Europe

European equities delivered further gains in October as earnings growth and improving economic indicators supported sentiment. Manufacturing and employment conditions remained strong across much of the eurozone.

The European Central Bank announced plans to reduce the pace of asset purchases beginning in 2018 while extending the programme duration. Markets responded positively to the cautious and gradual nature of policy normalisation.

United States

U.S. equities reached new highs in October as strong earnings reports and optimism surrounding tax reform supported markets. Technology companies continued leading gains, while economic data remained favourable.

The Federal Reserve maintained interest rates unchanged but continued signalling gradual tightening. Treasury yields remained relatively contained despite improving growth expectations.

United Kingdom

UK equities were relatively stable in October as stronger global markets offset continued Brexit uncertainty. Sterling movements continued influencing multinational exporters and broader market performance.

The Bank of England prepared markets for its first interest rate increase in over a decade as inflation remained above target and labour market conditions tightened.

Japan

Japanese equities rallied strongly during October as political stability and strong export demand boosted investor confidence. Prime Minister Shinzo Abe’s coalition secured a decisive election victory, supporting continuity in economic policy.

The weaker yen and accommodative Bank of Japan policy framework continued supporting exporters and broader market sentiment.

Emerging Markets

Emerging markets continued outperforming in October as global growth momentum and strong commodity demand supported investor sentiment. Capital inflows remained robust across several regions.

Asian markets remained particularly strong due to technology exports, while commodity exporters benefited from rising industrial metals and energy prices.

Commodities

Commodity prices strengthened further in October. Oil prices rose steadily due to tightening supply expectations and geopolitical concerns in the Middle East.

Industrial metals remained well supported by strong manufacturing activity globally, while gold prices traded within a relatively narrow range amid strong risk appetite.