October 2022

• Global markets rebounded in October as investors anticipated that central banks could eventually slow the pace of interest rate increases amid weakening economic conditions.
• Corporate earnings generally proved more resilient than feared despite slowing growth and rising inflation.
• Bond yields remained elevated, though volatility eased somewhat compared with September.
• Energy markets stabilised despite ongoing geopolitical uncertainty and supply concerns.
• Technology and growth sectors recovered modestly following heavy earlier declines.
• Emerging markets delivered mixed performance amid continued dollar strength and slowing global trade.

Asia (ex. Japan)

Asian markets outside Japan delivered mixed performance during October as investors responded positively to expectations of slower global monetary tightening, though Chinese markets remained under pressure.

Chinese equities weakened sharply following political developments at the Communist Party Congress and continued concerns surrounding the property sector and strict zero-COVID policies. Technology exporters elsewhere in Asia remained relatively stable despite slowing global demand.

Europe

European equities rebounded during October despite ongoing recession concerns, elevated energy costs and tightening monetary policy. Investors became cautiously optimistic that inflation pressures could begin moderating in coming months.

Corporate earnings across financials, industrials and luxury sectors generally exceeded reduced expectations, helping support broader market sentiment.

United States

U.S. equities rallied during October as investors anticipated that weakening economic conditions could eventually lead the Federal Reserve to slow the pace of interest rate increases.

Technology stocks recovered modestly despite continued pressure from higher bond yields, while financial and energy sectors remained relatively resilient due to elevated interest rates and commodity prices.

United Kingdom

UK markets stabilised during October following the extreme volatility experienced in September. The government reversed most of its proposed unfunded tax cuts, helping restore investor confidence.

Rishi Sunak became Prime Minister late in the month, contributing to improved financial stability and reduced pressure on sterling and gilt markets.

Japan

Japanese equities delivered relatively stable performance during October as exporters benefited from continued yen weakness and resilient external demand.

The Bank of Japan maintained ultra-loose monetary policy despite rising inflation and ongoing currency weakness, differentiating Japan from most major global economies.

Emerging Markets

Emerging markets delivered mixed results during October as stronger dollar conditions and slowing global growth continued pressuring investor sentiment.

Commodity-exporting economies remained relatively supported by elevated energy and raw material prices, while Chinese market weakness weighed heavily on broader Asian performance.

Commodities

Commodity prices stabilised during October following earlier declines as investors balanced slowing demand expectations against ongoing geopolitical supply risks. Oil prices remained elevated overall despite recession concerns.

Industrial metals remained relatively weak due to Chinese growth concerns, while gold prices stabilised modestly as bond yield volatility eased somewhat.