October 2020

• Global markets were volatile in October as rising coronavirus cases, renewed lockdown restrictions and uncertainty surrounding the U.S. presidential election weighed on investor sentiment.
• Equity markets experienced increased pressure late in the month as several European countries reintroduced containment measures.
• Technology and healthcare sectors remained relatively resilient compared with cyclical industries.
• Central banks continued maintaining highly accommodative policies and signalled readiness for further support if required.
• Emerging markets delivered mixed performance amid election uncertainty and fluctuating global risk appetite.
• Oil prices weakened significantly due to concerns regarding reduced mobility and energy demand.

Asia (ex. Japan)

Asian markets outside Japan delivered mixed performance during October as investors balanced strong Chinese economic recovery against renewed global uncertainty surrounding coronavirus outbreaks and the upcoming U.S. election. Chinese economic indicators remained supportive, particularly within manufacturing and exports.

Technology-focused markets such as Taiwan and South Korea continued benefiting from strong semiconductor demand, though broader regional sentiment weakened late in the month as global volatility increased.

Europe

European equities declined sharply during October as coronavirus cases surged across the continent and governments introduced renewed lockdown measures. Travel, hospitality and banking sectors experienced particularly heavy losses.

Economic recovery momentum weakened substantially as restrictions disrupted consumer activity and business confidence. The European Central Bank signalled additional monetary stimulus would likely be introduced later in the year.

United States

U.S. equities experienced increased volatility during October as investors focused on the approaching presidential election, delayed fiscal stimulus negotiations and rising coronavirus cases across multiple states.

Technology sectors remained relatively resilient overall, though broader markets weakened late in the month amid concerns regarding slowing recovery momentum and political uncertainty.

United Kingdom

UK equities weakened significantly during October as rising coronavirus infections led to stricter regional restrictions and concerns regarding additional economic disruption.

Brexit negotiations remained unresolved, contributing further uncertainty for investors and sterling. The Bank of England maintained expectations for continued monetary support amid deteriorating near-term conditions.

Japan

Japanese equities delivered relatively stable performance during October as exporters benefited from recovering Asian trade conditions and supportive domestic stimulus policies.

However, global market volatility and concerns regarding renewed economic restrictions internationally limited broader upside momentum.

Emerging Markets

Emerging markets delivered mixed results during October as global uncertainty and election-related volatility reduced investor appetite for risk assets.

Asian economies remained relatively resilient due to stronger regional recovery trends and continued technology demand, while commodity-exporting nations faced pressure from weaker energy prices.

Commodities

Commodity prices weakened during October as renewed lockdowns and rising coronavirus cases reduced expectations for near-term global demand recovery. Oil prices declined sharply due to concerns surrounding mobility restrictions and oversupply risks.

Industrial metals remained comparatively resilient due to strong Chinese manufacturing demand, while gold prices traded within a relatively stable range amid ongoing uncertainty and accommodative monetary policies.