Economic Views

Monthly markets review - July 2016

An overview of markets in July 2016 when equities recovered from the Brexit-induced sell-off and emerging markets outperformed.


  • Equity markets recovered following June’s Brexit-related sell-off as investors were reassured by the accommodative rhetoric from central banks and prospects for fiscal stimulus.
  • US equities advanced against a backdrop of mixed macroeconomic data and some strong quarterly earnings, particularly from the technology sector.
  • Eurozone equities posted positive returns, supported by some good corporate results and reassuring macroeconomic data. Banks continued to dominate the headlines ahead of the month-end stress tests.
  • UK equities gained as the political picture stabilized following the Brexit vote with Theresa May becoming the new prime minister.
  • Japanese equities gained despite a stronger yen over the month. Expectations grew surrounding the prospect of increased fiscal stimulus.
  • Emerging markets outperformed amid expectations that the supportive liquidity environment was set to continue. Brazil generated a solid gain although China lagged.
  • In fixed income, US and UK sovereign bond yields continued to fall.

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