Global equity markets continued to plunge on concerns that lower commodity prices and slowing Chinese growth could feed into corporate profitability and domestic demand in developed economies. The sell-off was broad-based, although declines in sterling were less severe, thanks to a weaker UK currency.
Risk aversion contributed to government bond yield declines in the US and UK as oil prices fell below $30, setting a new multi-year low. Disappointing US inventory data and the lifting of international sanctions on Iran, allowing the country’s full return to the global oil market, are adding to supply concerns.
The Chinese authorities also took steps to defend the yuan,buying the currency in the offshore market as policymakers verbally dismissed speculation of significant yuan depreciation.
Courtesy of Heartwood Investment Management.
