Market Pulse - October 2021

Markets snapshot

The MSCI AC World equity index rose 5.0% (5.3% in euro terms).

The US rose 7.0% (7.1% in €) on the back of a strong start to the Q3 earnings reporting season.

European equities rose 4.8% in euro terms as economic data remains strong and earnings surprised positively.

Emerging markets rose 0.9% (1.1% in €), underperforming the broader market, as some disappointing earnings reports fed fears about supply chain woes hitting global growth momentum.

The Eurozone >5-year bond index returned -0.6% in October as bond markets continued their sell-off for the year. This brought the total return in 2021 to -4.8%, which leaves the index in line for its worst performance since 1999. Ten-year German bond yields rose to -0.10% from -0.20% during the month.

The euro fell slightly to 1.1558 against the US dollar having reached 1.1687 intra month on the back of perceived hawkish ECB commentary.

Commodities rose 5.8% (6.0% in €) driven by sharply higher energy prices as the world continues to grapple with an energy crunch. The prices of gas, coal, and oil all rose over the month.

WTI oil rose 11.4%, to above $80 a barrel, amid strong demand, and shortages in natural gas and coal have led to substitution to oil. OPEC+ announced only a gradual increase in production levels in September, which boosted oil prices.

Gold was up 1.5% over the month as market-based inflation expectations pushed higher.

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