May market update – global investors had plenty to focus on

Chief Investment Officer Chris Godding and Senior Research Analyst Louie French give their commentary on what happened in the markets and global economies over the month of May 2018.

Global investors had plenty to focus on in May, with a minor sell-off in Emerging Market assets, ongoing China/US trade quarrels, heightened tensions in the Middle East and political dramas in both Italy and Spain. Collectively these events drove a flight to safety by investors in May, particularly in currency and fixed income markets, where German bunds, UK gilts, the Japanese yen, the US dollar and Treasuries were notably strong.

What happened in the markets?

• The recent strength of the US dollar – linked to interest rate expectations – has created a number of headwinds in the Emerging Markets, which were amongst the laggards in equity and fixed income markets in May
• Unsurprisingly, European banks and peripheral Europe returns were also weak given the political backdrop, with events in Italy taking centre stage
• Elsewhere in equity markets, it was a positive month for UK and US markets, with accommodative monetary policy and higher commodity prices helping returns

Read our market commentary

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