Market Pulse - November 2019

The MSCI AC World equity index rose 2.0% (0.4% in euro terms).

Japanese equities rose 4.9% (2.5% in euro terms) as economic data exceeded expectations and the negative impact from the recent VAT hike seemed less than anticipated.

Emerging markets rose 3.0% (1.8% in euro terms), as trade concerns eased while US dollar weakness was a positive influence.

The UK underperformed, falling -2.1% (+0.5% in euro terms), despite progress on the Brexit front. The resultant strength in sterling was negative for UK companies, which have a relatively large international sales exposure.

Europe also lagged, rising 1.4% (1.0% in euro terms) as economic data was generally soft, while lingering questions over the level of additional policy space left for the ECB also acted as a drag.

Eurozone >5-year bonds fell -1.5%, as the German 10-year yield rose to -0.41% on the back of easing global growth concerns.

Italian and Spanish 10-year spreads against Germany narrowed to 133bps and 65bps, respectively, in anticipation of the ECB restarting asset purchases in November.

The euro rose to 1.1146 against the US dollar, with the dollar weakening on the back of declining global growth fears. Meanwhile, concerns over the potential limits on the scale of further ECB policy easing also contributed to the euro’s strength.

Commodities rose 1.2% (-1.1% in euro terms). West Texas Intermediate (WTI) oil rose slightly by 0.2% Metal prices were generally firmer on the back of the improved growth sentiment and the weaker US dollar, which tends to be positive for commodities. Copper rose 1.3%, supported by tensions in Chile, while gold rose 2.8%.

Download this insight: Market Pulse October 2019 (656Kb)

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