Highlights
- Global equities, as measured by the MSCI World index, gained in August but there were significant regional differences amid persistent US-China trade tensions and Turkey’s currency crisis.
- US equities gained ground and significantly outperformed other major regions, as economic growth remained extremely robust.
- Eurozone equities declined. Banks were under pressure amid concerns over exposure to emerging markets as well as uncertainty over whether Italy’s 2019 budget proposal will comply with EU fiscal rules.
- The UK’s FTSE All-Share fell over the period. The Bank of England (BoE) announced a further 0.25% increase in base rates to 0.75%.
- Japanese equities saw negative returns with trade tensions continuing to dominate the global headlines.
- Emerging market equities lost value amid a currency crisis in Turkey and further escalation in US-China trade relations. Countries exposed to global liquidity tightening experienced currency weakness, notably South Africa.
- In bond markets, the wider risk aversion caused the US 10-year yield to drop from 2.96% to 2.86%. 10-year Bund and gilt yields also fell while Italian yields rose.
Please note any past performance mentioned in this document is not a guide to future performance and may not be repeated.
