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Article | 01 November 2021 | Investments
the
MARKETS
Equities
US equity markets hit new record highs, after a blowout week for Q3 earnings, as Microsoft resumed the title of world’s biggest company. European markets were also boosted by strong earnings reports. Japanese indices were mixed in the run up to the general election, while the property sector weighed on performance in China.
Bonds
The US Treasury yield curve flattened slightly, as short-dated bond yields rose in anticipation of tighter monetary policy from the US Federal Reserve (Fed). Investment grade corporate bonds enjoyed positive sentiment on strong earnings reports, while high yield bonds were mixed, with a close eye also on inflation.
Currencies
The US dollar made ground against all majors, while the euro slipped back, reflecting a potential divergence in monetary policy. The yen stabilised after recent weakness, while sterling marked time ahead of the Bank of England meeting.
Commodities
Oil ended the week slightly lower, in advance of production discussions at this week’s OPEC meeting. Gold was little changed over the week.
Responsible investing
The UN COP26 Climate Change Conference got underway, flagged as the ‘last, best chance’ to reduce global warming.
MACROECONOMIC
UPDATE
The European Central Bank downplayed concerns over inflation, suggesting levels would moderate in 2022, then settle below target.
China’s September industrial profits rose 16.3% y/y, with concerns remaining over commodity prices and logistics costs.
Facebook was rebranded as Meta, aiming to move the group’s identity beyond the social media platform, while Tesla became the first $1 trillion car manufacturer.
on the
RADAR
The US Federal Reserve will likely give an update on tapering, while the Bank of England looks set to raise interest rates.
A raft of macroeconomic data for October, including PMIs and US employment, will indicate the strength of the recovery.
