Global markets delivered mixed but resilient returns in August, with sentiment shaped by clearer policy signals from central banks worldwide, and moderating inflation expectations in the US. In the US, equities continued to trend higher, with the S&P 500 and NASDAQ gaining 2.0% and 1.7% respectively, supported by a strong earnings season. By comparison, European markets lagged with the FTSE 100 and Euro STOXX 50 achieving gains of 1.2% and 0.6% respectively, highlighting the gap between US resilience and Europe’s limited exposure to high-growth technology shares. In fixed income, the yield on the US 10-year bond declined by 15%, reflecting heightened expectations for rate cuts in September and increased political pressure on the Federal Reserve Bank. In contrast, the UK 10-year bond yield rose by 15%, as July’s inflation numbers came in higher than expected. The Bank of England delivered a 25 basis points rate cut in August, but its hawkish tone reduced expectations of further rate cuts this year. Commodity markets delivered mixed returns over the month, with Brent crude oil decreasing by 4.4% on lower demand expectations and gold gaining 5.4% buoyed by a weaker dollar and expectations of Fed rate cuts which enhanced its appeal to investors. Currency markets saw a notable shift, with both sterling and the euro strengthening against the US dollar by 2.2% and 2.4%.

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