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Market update

October Market and Economic Update

Global equity market volatility continued through September as a more cautious appraisal of the global economy from the US Federal Reserve unnerved investors. Equities responded by giving back earlier gains, corporate bonds were also weak, whilst US Treasuries and UK Gilts rallied. Eurozone business activity and employment rose through August, indicating a continuation of the slow, but steady expansion. However, this was not enough to stop the European Central Bank cutting its growth and inflation forecasts for 2015 and beyond. In Japan, the economy returned to deflation – the first annual decline since April 2013, led by weak oil prices and domestic demand.

 

When will US interest rates rise?

                                  

  • After months of speculation, the biggest news story from markets in September was the US Federal Reserve Open Market Committee’s (FOMC) decision to leave interest rates unchanged                 
  • US Federal Reserve Chairwoman Janet Yellen cited low inflation, slowing growth in China and recent market turbulence as deterrents to a September rate rise
  • Yellen subsequently stated that US interest rates would likely rise later this year. US data released through the month had largely painted a positive picture, led by housing and employment reports

                           

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Important Information

The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. This is not a personal recommendation or advice to invest. Past performance is not a guide to future performance.

Different funds carry varying levels of risk depending on the geographical region and industry sector in which they invest. You should make yourself aware of these specific risks prior to investing.

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