Europe Outperformed: European equities led global gains, supported by financials and healthcare, while inflation rose above the ECB’s target at 2.2%. Germany lagged due to fiscal concerns.
Rate Cut Expectations Boosted Sentiment: Hopes for interest rate cuts in the US and UK lifted markets. The Bank of England held rates at 4% and signalled possible easing, while US Treasuries rallied on dovish Fed comments.
Tech Valuation Concerns Weighed on Asia: Asia-Pacific markets declined as stretched AI and semiconductor valuations hit China, Korea and Taiwan, while India stood out with strong performance driven by policy stability and easing inflation.
Global markets delivered mixed performance in November. European equities led gains, outperforming the US and emerging markets thanks to limited AI exposure and strength in financials and healthcare, while Germany lagged amid fiscal concerns and inflation rose to 2.2%, above the ECB’s target. UK shares edged higher following a budget that relied on stealth tax measures, as the Bank of England held rates at 4% and signalled possible cuts, with inflation easing to 3.6% and GDP contracting slightly. US equities posted modest gains, recovering late in the month on Nvidia’s strong results and growing expectations of a December rate cut, despite softer labour data and weaker consumer confidence. Asia-Pacific markets declined on tech and AI valuation concerns, with China, Korea and Taiwan under pressure, while India outperformed on policy stability and easing inflation. Emerging markets were uneven: Latin America surged on strong commodity prices and currency gains, ASEAN posted modest advances, and emerging Europe was mixed. Fixed income markets saw US Treasuries rally on dovish Fed signals, UK gilts recover after a larger fiscal buffer, and eurozone bonds deliver mixed returns, while corporate bonds in the US and UK enjoyed a positive month despite wider spreads.
European equities outperformed US, global, and emerging markets in November, aided by limited AI exposure. Spain (banks) and Switzerland (healthcare) led gains, while Germany lagged amid fiscal spending concerns. Inflation rose to 2.2%, above the ECB’s 2% target, driven by Germany at 2.6%. ECB is expected to keep rates at 2%. GDP growth was flat in Germany; Spain upgraded its 2025 forecast to 2.9%. Fiscal plans in Germany face criticism for limited economic impact.
UK equities edged higher after the Chancellor’s budget, which included stealth tax rises and a freeze on personal tax thresholds. BoE held rates at 4%, signaling possible cuts soon. Inflation fell to 3.6% in October, with core at 3.4%. GDP contracted 0.1% in September, hit by manufacturing weakness. Wage growth slowed, unemployment rose to 5%, and consumer confidence dropped sharply.
US equities posted modest gains, recovering late in the month on Nvidia’s strong results and hopes of a December rate cut. Labour data was mixed: 119,000 jobs added, unemployment up to 4.4%. Consumer confidence fell sharply to 88.7. PMI improved slightly to 54.8, signalling continued growth.
Asia-Pacific equities fell on tech and AI valuation concerns. China struggled with weak data and property stress despite stimulus efforts. Korea and Taiwan dropped on semiconductor weakness. India outperformed on policy continuity and easing inflation. Japan declined amid AI corrections and fiscal worries; Australia fell on inflation and rate hike speculation.
Emerging market equities were mixed. Latin America led gains, driven by Brazil’s longest winning streak in decades and strong commodity prices. Mexico hit record highs; Chile benefited from copper strength. Asian EM was uneven: India rose, while China, Korea, and Taiwan fell. ASEAN markets edged higher, led by Indonesia; Thailand lagged on political and economic uncertainty. Emerging Europe was mixed; Hungary hit record highs, while Poland fell.
US Treasuries rallied (+0.61%) on hopes of a December rate cut, supported by dovish Fed comments. UK gilts gained (+0.15%) after a larger fiscal buffer and reduced issuance plans. Eurozone bonds were mixed; German bunds fell (-0.37%), while French and Italian bonds rose slightly. Corporate bonds had a strong month in the US and UK, though spreads widened. Euro IG underperformed (-0.23%).
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