Quarterly markets review - Q3 2016

An overview of markets in Q3 2016 when equities gained amid lower volatility and emerging markets outperformed.

6 October 2016

Investment Communications Team

Investment Communications Team

  • It was a generally positive quarter for markets and volatility across equities and fixed income was markedly lower compared to recent quarters.
  • US equities advanced and expectations rose that the Federal Reserve (Fed) would increase rates again before the end of 2016.
  • Eurozone equities made gains with economically sensitive sectors such as information technology and consumer discretionary outperforming.
  • UK equities moved higher against a more stable domestic political backdrop following the EU referendum vote. The Bank of England launched a series of monetary easing measures.
  • Japanese stocks were supported as the government released details of a fiscal spending package designed to run alongside the Bank of Japan’s continuing aggressive monetary policy.
  • Emerging market equities delivered strong returns as investors focused on high yielding assets. Among the equity markets to benefit most from the yield-seeking trend were Brazil, Russia and South Africa.
  • In bond markets, the 10-year Treasury yield climbed over the period while gilt yields fell. Global corporate bonds performed strongly.

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