June continued the positive momentum with equities and bonds once again making gains.
In June, the MSCI World Equity Index increased by 1.5% while bonds also generated positive returns with the ML over 5 year EMU Govt. Bond Index up 1.6%. From a regional perspective, Japanese equities led the way generating a return of 4.9%, continuing the positive sentiment in May.
Emerging markets returned 2.3% on foot of better sentiment while other developed markets (Eurozone, UK, US) all returned between -0.8% and 1.8% (all returns are shown in euros).
On the currency front, the euro weakened by 0.1% against the Yen and strengthened 0.3% against the US Dollar. Meanwhile the DJUBS Commodities index had a slight positive return in June.
On the economic data side, US business activity, new orders and employment grew at rates not seen since the recession. The ECB announced five stimulus measures at their June meeting, which included cuts to interest rates and a negative deposit rate. The UK saw a surge in business investment which is a positive for a more sustained recovery in the economy. Eurozone economic growth slowed to a 6 month low, whilst emerging market data improved.
Source – Kleinworth Benson Investors.