The second quarter of 2018 was positive for broad equity markets despite the presence of geopolitical concerns. The following key developments occurred over April, May and June.
- A reduction in trade policy concerns and continued improvement in US economic fundamentals boosted investor sentiment over April.
- The US Federal Reserve (‘the Fed’) chose to keep interest rates unchanged at the start of May, but strengthened expectations of a rate hike in June. This contrasted with the UK, where expectations of monetary tightening fell after the release of sluggish economic data, which weakened sterling further.
- Equity performance across regions was mixed, as fears around a global trade war reignited, the dollar continued to strengthen and political turmoil within Europe influenced trading patterns.
- Equity returns were muted over June, as trade concerns and other macro issues such as Brexit weighed in on investor sentiment.
- Overall, global equity markets largely shrugged off political concerns over Q2, delivering 7% in GBP terms (3% in hedged terms), driven by the performance of the US and UK.
Download our PDF for a full review of the key developments, or contact Farrakh Ashraf for further information.