European equity markets weaker in June, but maintain lead over US equities year-to-date.
Asia Pacific equities advanced led by Korea and Taiwan.
ASEAN markets struggle, with political instability and weak data weighing on Thailand, Singapore, and Indonesia.
Global equities were mixed in June, with regional performance shaped by economic conditions and geopolitical developments. European markets dipped slightly, underperforming global peers, as energy and utilities gained on rising oil prices while consumer sectors lagged. The UK market rose modestly, supported by improved consumer confidence and easing inflation despite slower growth. US equities advanced on progress in US-China trade talks and strong tech performance, although tensions in the Middle East escalated. Asian markets, led by China, Japan, and India, posted gains on trade developments and policy support. Emerging markets outperformed, driven by resilient fundamentals and higher oil prices.
European equities were slightly lower in June (Euro terms), underperforming global peers. This follows a prolonged period of EU outperformance and strong absolute gains this year. A return to technology sector outperformance (especially in the US market) was evident in June. Energy and utilities sectors were also outperformers as geopolitical tensions pushed oil prices higher. Consumer staples and consumer discretionary sectors were underperformers. The German draft Budget reiterated commitment to increased fiscal spending. Euro strength versus the US Dollar also made headlines.
The UK equity market closed modestly higher in June, due to a more positive economic outlook and consumer confidence improving. The Office for National Statistics (ONS) figures showed that UK inflation fell modestly in May, from 3.5% to 3.4%, in line with consensus expectations. Core inflation fell from 3.8% to 3.5%. The Bank of England (BoE) held interest rates at 4.25%. UK economic growth fell by 0.3% in April. GfK’s consumer confidence index rose in June. British retail sales fell in May.
US equity markets advanced in June with investors responding positively to progress in US-China trade talks. Geopolitical tensions in the Middle East escalated in the second half of the month. The S&P 500 surpassed highs last seen in February. The US inflation rate rose slightly from 2.3% to 2.4%. The Federal Reserve (Fed) kept interest rates unchanged. The US economy added 139,000 jobs in May. The US consumer confidence index cooled in June. The Composite Purchasing Managers' Index (PMI) for June came in at 52.8.
Chinese equities posted gains in June, supported by the announcement of a preliminary trade framework between Beijing and Washington. Domestic economic conditions remain uneven. Export activity and industrial production delivered upside surprises. Taiwanese equities posted gains, underpinned by improved global risk appetite. Korean equities were supported by renewed policy momentum. Indian equities ended the month on a strong footing. Japanese equities advanced, benefiting from a constructive global backdrop. Australian equities posted solid gains, underpinned by a stable unemployment rate.
Latin American equities outperformed in June, underpinned by resilient domestic fundamentals. In Mexico, investor sentiment improved following President Claudia Sheinbaum’s successful resolution of tariff negotiations with the US. In Brazil, the central bank raised the Selic rate by 25 basis points (bps) to 15%. Chile also posted gains. Turkish equities advanced, supported by improving investor sentiment. Hungary also performed well. In Poland, political clarity helped stabilise markets. In the Middle East, equity performance was broadly positive. Gulf markets benefited from increased oil prices.
A positive month for bond markets with investors growing in confidence that the Fed will be able to cut interest rates this year. US treasuries returned 1.29%. UK gilts gained 1.55%. German bunds lost ground, down 0.39%. The Fed held interest rates steady. The UK inflation rate eased to 3.4%. Eurozone inflation edged up to 2%. The Swiss National Bank cut its key rate to 0%. Corporate and high yield bonds delivered broad gains.
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