Global Markets Summary

Equity and fixed income markets delivered another three months of positive returns in the September quarter, against a news backdrop dominated by the US-China trade war, Brexit, Hong Kong unrest and headlines about slowing global economic growth.

Global developed equity markets posted returns of more than 4% for the quarter, while the Australian market was up about 2.5% over the quarter. Emerging markets ended the quarter slightly weaker.

For the calendar year to date, developed equity markets delivered very solid gains of more than 20%, with New Zealand and Australia among the best performing counties. Emerging market returns were about half that.

In sectoral terms, real investment trusts (REITs) were top performers in developed markets, alongside utilities. in Australia, consumer staples stood out, white IT was the top sector in emerging markets. Energy stocks were global laggards.

In bond markets, the highlight was a very positive term premium as longer bonds beat shorter bonds. All the major yield curves remained inverted over the quarter, with the UK and Euro curves delivering the highest returns. Credit spreads increased marginally.

On currency markets, the Australian dollar weakened against the US dollar and Japanese yen, while strengthening against the NZ dollar, and to a lesser extent, against the Euro.