Monthly markets review - January 2017
- Global equity markets gained ground in January in US dollar terms. Despite some doubts emerging late in the month, hopes of expansive fiscal spending in the US persisted, prompting further gains.
- US equities registered positive returns with major indices hitting new all-time highs amid optimism over President Trump’s plans for tax cuts and higher infrastructure spending.
- In the eurozone, macroeconomic data was encouraging but equities posted negative returns. Energy was the weakest sector while information technology was the only sector to register a positive return.
- UK equities were slightly negative as oil & gas stocks succumbed to some profit-taking and healthcare stocks suffered amid uncertainty over the US drug pricing outlook.
- Japanese equities recorded a narrow positive return. The yen gained ground against most major currencies in January. Investors continued to prefer more economically-sensitive areas of the market.
- The MSCI Emerging Markets index recorded a strong gain, supported by US dollar weakness. Higher industrial metals prices were beneficial for Latin American markets.
- Global bond markets diverged in January, a theme expected to persist in 2017. A stable US Treasuries market contrasted with higher yields in Europe, where inflation jumped again.
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