Global Market Perspective
We look ahead to what’s in store for the macroeconomic and market picture in 2017, as well as looking back on an eventful 2016 when the US presidential election and Brexit dominated the news.
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- The fourth quarter saw government bond yields rise amid expectations for higher inflation after the US election victory for Donald Trump. Equity markets generally gained, with financial stocks performing well.
- US equities advanced and macroeconomic data largely improved. The quarter was dominated by the presidential election and the Federal Reserve (Fed) raised interest rates.
- Eurozone equities made gains. Financials performed well amid higher bond yields and the European Central Bank extended its quantitative easing program.
- UK equities also moved higher, supported by financials while resources stocks performed well after OPEC agreed to cut oil production.
- Japanese stocks were strong, drawing support from the currency as the yen weakened in November and December.
- Emerging market equities underperformed, posting a negative return owing to uncertainty over US trade and foreign policy, as well as the prospect of tighter US dollar liquidity.
- Government bond yields moved higher and yield curves steepened. Global corporate bonds generated negative total returns but outperformed government bonds.