October 2023

• Global markets experienced heightened volatility in October as rising geopolitical tensions, elevated bond yields and concerns regarding slowing economic growth weighed on investor sentiment.
• The conflict in the Middle East increased uncertainty across financial and energy markets.
• Bond yields reached new multi-year highs before easing slightly late in the month.
• Technology stocks experienced mixed performance amid rising interest rates and resilient earnings.
• Central banks maintained restrictive policy guidance despite moderating inflation trends.
• Commodity markets were influenced heavily by geopolitical developments and energy supply concerns.

Asia (ex. Japan)

Asian markets outside Japan delivered mixed performance during October as investors balanced concerns regarding Chinese economic weakness against improving policy support measures from Beijing.

Technology-oriented markets such as Taiwan and South Korea remained relatively resilient due to continued artificial intelligence-related semiconductor demand, though broader regional sentiment remained cautious.

Europe

European equities weakened during October as higher interest rates, slowing economic activity and geopolitical uncertainty affected investor confidence across the region.

Manufacturing activity remained subdued while elevated energy costs and weak consumer demand continued creating pressure for several sectors.

United States

U.S. equities experienced increased volatility during October as Treasury yields climbed further and investors assessed the implications of prolonged higher interest rates.

Technology companies delivered relatively resilient earnings overall, though rising yields continued creating valuation pressure for growth-oriented sectors.

United Kingdom

UK equities delivered relatively weak performance during October as slowing economic activity and elevated borrowing costs weighed on investor sentiment.

However, easing inflation data late in the month improved expectations that the Bank of England could soon pause further interest rate increases.

Japan

Japanese equities remained relatively stable during October as weaker yen conditions supported exporters and improving corporate profitability trends continued attracting investor interest.

The Bank of Japan adjusted aspects of its yield curve control framework again, increasing speculation regarding the gradual normalisation of monetary policy.

Emerging Markets

Emerging markets delivered mixed results during October as rising U.S. yields, geopolitical uncertainty and slowing Chinese growth continued creating headwinds for investor sentiment.

Technology-related Asian economies remained relatively supported by semiconductor demand, while broader risk appetite weakened globally.

Commodities

Commodity prices experienced heightened volatility during October due to geopolitical tensions in the Middle East and concerns regarding potential energy supply disruptions. Oil prices fluctuated sharply throughout the month.

Gold prices strengthened significantly as investors increased safe-haven allocations amid geopolitical uncertainty and volatile bond markets, while industrial metals remained relatively weak due to subdued Chinese demand.