A look back on markets in October, when risk appetite picked up amid hopes of progress on trade talks.
October saw gains for global equities amid signs of progress on a US-China trade deal, while central banks remained supportive. Government bonds in general moved lower.
US equities rallied. US-China trade negotiations saw the two sides agree the outline of a potential mini trade deal. The Federal Reserve lowered interest rates by 25 basis points, its third cut this year.
Eurozone equities posted gains as some economically-sensitive sectors performed well. GDP growth data for Q3 defied recession worries, with the eurozone economy expanding by 0.2% quarter-on-quarter.
UK equities underperformed against the backdrop of a very strong rebound in sterling. Sterling bounced back as the prospect of a “no deal” Brexit outcome on 31 October receded.
The Japanese market recorded a gain of 5.0%. The yen fluctuated against major currencies, reflecting changing views on the likely action of central banks, but ended the month virtually unchanged against the US dollar.
Emerging market equities recorded a strong return, benefiting from a pick-up in risk appetite. Positive sentiment towards US-China trade talks, further global central bank easing and US dollar weakness all proved supportive.
In fixed income, government bond yields rose overall (meaning prices fell). Corporate bonds produced positive returns and outperformed government bonds.
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