September 2017

• Global markets continued advancing in September as synchronised global growth and strong corporate earnings supported investor sentiment.
• Central banks maintained gradual approaches to policy normalisation, helping keep financial conditions supportive.
• Technology and industrial sectors remained key drivers of equity performance globally.
• Emerging markets outperformed developed peers due to dollar weakness and improving trade conditions.
• Oil prices strengthened as supply expectations tightened.
• Volatility remained subdued despite geopolitical tensions and ongoing policy uncertainty.

Asia (ex. Japan)

Asian markets outside Japan posted strong gains in September as export demand and technology sector strength continued supporting regional growth. Chinese economic conditions remained stable, with industrial production and retail spending supporting confidence in domestic demand.

South Korea and Taiwan benefited from sustained semiconductor demand, while India remained resilient due to ongoing reform momentum and improving business sentiment. Regional currencies were generally stable amid continued weakness in the U.S. dollar.

Europe

European equities advanced during September as economic indicators across the eurozone continued improving. Manufacturing surveys and business confidence remained near multi-year highs, reinforcing expectations of durable recovery.

The European Central Bank maintained a cautious approach toward reducing stimulus despite strengthening economic conditions. The euro remained relatively strong, while bond yields fluctuated modestly alongside changing expectations for future policy adjustments.

United States

U.S. equities reached further record highs in September as investor confidence remained strong and corporate earnings expectations improved. Economic activity continued expanding despite temporary disruptions caused by major hurricanes.

The Federal Reserve announced plans to begin reducing its balance sheet while maintaining a gradual approach toward future rate increases. Treasury yields rose modestly as markets adjusted to stronger growth expectations.

United Kingdom

UK equities delivered modest gains in September as global market strength offset continued Brexit-related uncertainty. Sterling remained volatile due to shifting expectations surrounding negotiations with the European Union.

Inflation remained elevated due to earlier currency depreciation, while consumer spending growth slowed moderately. The Bank of England signalled that interest rate increases could become necessary if inflation pressures persisted.

Japan

Japanese equities advanced strongly in September as global growth and export demand remained supportive. Corporate earnings expectations improved further, particularly among industrial and technology exporters.

The Bank of Japan maintained accommodative monetary policy settings, while a relatively stable yen supported market sentiment and corporate profitability.

Emerging Markets

Emerging markets outperformed again in September as stable commodity prices, improving global trade and continued capital inflows supported performance. Asian economies led gains due to strong export momentum.

Commodity exporters also benefited from firmer industrial metals and oil prices, while Latin American markets remained supported by improving investor confidence and stabilising currencies.

Commodities

Commodity prices strengthened during September as improving global growth supported demand expectations. Oil prices rose due to tightening supply conditions and expectations of extended OPEC production restraint.

Industrial metals remained strong due to robust Chinese demand and global manufacturing growth. Gold prices weakened modestly as risk appetite remained elevated and bond yields moved higher.