Monthly viewpoint

Monthly markets review

Overview of markets in February 2019

13/03/2019

Highlights

  • Global equities made further progress in February as investors grew optimistic that a resolution to the US-China trade standoff is drawing nearer. Government bond yields broadly rose (i.e. prices fell).
  • US equities rose. The news that the US has suspended the imposition of increased tariffs on $200 billion of Chinese goods was supportive.
  • Eurozone equities also gained. A source of support was the suggestion that the European Central Bank could restart its targeted long-term refinancing operations, which offer cheap loans for banks.
  • UK equities rose but lagged global equities as a result of sterling strength, which was due to rising hopes that the UK would avoid a disorderly exit from the European Union.
  •  Japanese equities gained as fears receded over the extent of the global slowdown. After moving sharply stronger at the end of 2018, the yen has gradually weakened again.
  • Emerging markets (EM) equities recorded a marginal gain in February, boosted by the easing US-China trade tensions.
  • Government bond yields rose in February with sentiment and conditions continuing to favour riskier assets. Corporate bonds outperformed government bonds.

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