Economic Views

Quarterly markets review - Q1 2016

An overview of markets in Q1 2016, when emerging market equities outperformed their developed counterparts, supported by hopes of political change in Brazil.


  • Global equities followed a V-shaped trajectory over the quarter, with stocks falling sharply to mid-February and rebounding thereafter to end virtually flat in US dollar terms. The actions of central banks and a recovery in the oil price were important contributors to the market turnaround.
  • US equities gained over the quarter. The market responded positively as forecasts for additional increases in US interest rates were deferred following dovish comments from Federal Reserve chair Janet Yellen.
  • Eurozone equities had a turbulent quarter with banks under particular pressure. The European Central Bank announced fresh monetary policy easing in early March. In the UK, sterling fell as markets digested the possibility that the UK could leave the EU following the June referendum.
  • Japanese equities declined amid unusual volatility. The Bank of Japan surprised investors with a move to a negative interest rate policy.
  • Emerging market equities posted positive returns and outperformed developed market equities. An easing in US dollar strength supported emerging markets while Brazil was the strongest market amid heightened expectations for the political change.
  • In bonds, both government and corporate indices were positive. The 10-year Treasury yield fell from 2.27% at the end of December to 1.77% at the end of March.

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Monthly Review 0 pages | 252 kb