October 2019

• Global markets advanced in October as progress in U.S.-China trade negotiations and continued central bank support improved investor sentiment.
• Equity markets globally recovered further, led by technology and cyclical sectors.
• The Federal Reserve delivered another interest rate cut while signalling a pause in further easing unless economic conditions deteriorated.
• European markets benefited from reduced Brexit uncertainty following a new withdrawal agreement framework.
• Emerging markets strengthened alongside improving trade optimism and stable financial conditions.
• Bond yields rose modestly as recession fears eased and risk appetite improved.

Asia (ex. Japan)

Asian markets outside Japan performed strongly during October as investor optimism improved following signs of progress in U.S.-China trade negotiations. Chinese economic data remained relatively soft, though policy support measures helped stabilise growth expectations.

Technology-heavy markets such as Taiwan and South Korea benefited from improving semiconductor sentiment and stronger global demand expectations. India also advanced following government measures aimed at stimulating investment and economic activity.

Europe

European equities rallied during October as investors responded positively to improving trade negotiations and reduced Brexit uncertainty after the UK government reached a revised withdrawal agreement with the European Union.

Economic conditions remained relatively weak across the eurozone, particularly within manufacturing sectors, though accommodative European Central Bank policies continued supporting financial conditions and investor confidence.

United States

U.S. equities reached fresh record highs during October as improving trade optimism and supportive corporate earnings boosted investor confidence. Technology and consumer sectors remained among the strongest performers.

The Federal Reserve delivered another 0.25% interest rate cut during the month but indicated that future easing would depend on further economic deterioration. Employment and consumer spending conditions remained supportive overall.

United Kingdom

UK equities advanced during October as reduced fears of a disorderly Brexit improved investor sentiment. Sterling strengthened notably following progress toward a revised withdrawal agreement.

Domestic economic conditions remained subdued due to prolonged political uncertainty, while the Bank of England maintained its cautious monetary policy stance amid slowing business investment.

Japan

Japanese equities performed strongly during October as improving global trade sentiment and stable currency conditions supported exporters and manufacturing sectors.

The Bank of Japan maintained its highly accommodative monetary policy framework while monitoring global growth risks and domestic economic conditions.

Emerging Markets

Emerging markets advanced during October as improving trade negotiations, stable commodity prices and lower global interest rates encouraged investor inflows.

Asian emerging markets led gains due to stronger technology sentiment and stabilising Chinese growth conditions, while commodity exporters also benefited from improving global demand expectations.

Commodities

Commodity prices were mixed during October. Oil prices remained relatively stable as improving demand expectations balanced ongoing supply concerns and geopolitical risks.

Industrial metals strengthened modestly alongside improving trade optimism, while gold prices eased slightly as investor risk appetite improved and bond yields rose modestly.