Monthly viewpoint

Monthly markets review

Overview of markets in January 2018

07/02/2018

Highlights:

  • Widespread positive macroeconomic data continued to drive global equities firmly higher in January. Government bond yields rose, reflecting higher growth and inflation expectations.
  • US equities enjoyed a strong advance as economic momentum remained robust.
  • Eurozone equities posted gains; the region’s economic expansion led to some suggestions that the European Central Bank (ECB) could soon end its ultra-loose monetary policy.
  • The FTSE All-Share index fell in January. Large caps and overseas-focused parts of the market performed poorly as sterling strengthened against a weaker dollar.
  • Japanese equities made gains for the month; investors mainly focused on the short-term implications of the Bank of Japan’s dealing in the bond market.
  • Emerging market equities posted a robust return with continued strength in global growth and trade, as well as US dollar weakness, supporting performance.
  • Government bond yields rose significantly, reflecting higher growth and inflation expectations after the US tax reform bill passed in December. Corporate bonds performed well.

Author

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