September 2023

• Global markets weakened in September as rising bond yields, higher oil prices and expectations for prolonged elevated interest rates pressured investor sentiment.
• Central banks reinforced “higher for longer” messaging regarding interest rates due to persistent inflation concerns.
• Technology and growth sectors experienced increased volatility amid sharply rising Treasury yields.
• Energy prices surged to their highest levels of the year following production cuts from major oil exporters.
• Chinese economic weakness and property sector concerns continued weighing on global growth expectations.
• Emerging markets faced pressure from stronger U.S. dollar conditions and tighter financial markets.

Asia (ex. Japan)

Asian markets outside Japan weakened during September as slowing Chinese growth, continued property sector stress and rising global bond yields weighed on investor confidence.

Chinese authorities introduced additional support measures for the property sector and broader economy, though investors remained cautious regarding the effectiveness of policy responses.

Europe

European equities declined during September as rising energy prices and higher interest rates increased concerns regarding slowing economic growth across the region.

Manufacturing activity remained weak throughout much of Europe, while the European Central Bank maintained restrictive policy guidance despite deteriorating growth conditions.

United States

U.S. equities weakened during September as Treasury yields surged to multi-year highs following Federal Reserve guidance indicating that interest rates could remain elevated for an extended period.

Technology and growth stocks faced renewed pressure from rising yields, while energy-related sectors benefited from sharply higher oil prices.

United Kingdom

UK equities weakened during September as higher bond yields and slowing economic activity weighed on investor sentiment.

Inflation remained elevated despite signs of weakening consumer demand, while the Bank of England maintained restrictive monetary policy conditions.

Japan

Japanese equities delivered relatively resilient performance during September as weaker yen conditions continued supporting exporters and corporate earnings.

However, investors monitored the possibility of currency intervention by Japanese authorities as yen weakness intensified against the U.S. dollar.

Emerging Markets

Emerging markets faced pressure during September as rising U.S. yields and stronger dollar conditions reduced investor appetite for risk assets.

Commodity-importing economies faced additional pressure from rising oil prices, while Chinese economic weakness weighed on broader Asian market sentiment.

Commodities

Commodity prices strengthened during September, led by energy markets. Oil prices surged following extended production cuts from Saudi Arabia and Russia alongside resilient global demand.

Industrial metals remained relatively weak due to slowing Chinese construction activity, while gold prices faced pressure from rising real yields and stronger dollar conditions.