Economics

Quarterly markets review - Q2 2017

An overview of markets in Q2 2017 when equities were supported by encouraging corporate earnings and a generally positive economic picture.

6 July 2017

Investment Communications Team

Investment Communications Team

  • Global equity markets advanced in Q2 with MSCI World returning 4.2% (in US dollars). A strong corporate earnings season and generally positive economic data supported gains, while political risk eased in Europe.
  • US equities gained despite some mixed economic data and amid political uncertainty over the ability of the US administration to push through its fiscally expansive policies.
  • Eurozone equities gained. Reduced political risk, positive economic data and improved corporate earnings all supported shares. Gains were capped by worries the central bank could start to tighten policy.
  • UK equities made positive returns amid robust corporate earnings although it was a volatile quarter amid uncertainty over the political backdrop and the future path of monetary policy.
  • Japan registered positive returns amid an encouraging corporate earnings season and an upbeat assessment from the Bank of Japan on the health of the economy.
  • Emerging market equities benefited from the supportive global backdrop, outperforming developed markets. A notable exception was Russia amid a sharp decline in Brent crude prices.
  • In fixed income, government bond yields were well-supported for much of the period, though a sell-off in the last week of June resulted in losses for Bunds and gilts for the quarter overall.

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