Our Global Markets Overview provides a high level review and outlook each month for markets and economies.
Stress-intervention cycle continues
Forward-looking growth indicators continued to disappoint during August, with business surveys and employment data consistent with lacklustre growth. This bad news actually provided a boon to risky assets over the month, as weaker data led to greater expectations of additional support from the Federal Reserve (which were subsequently satisfied). In addition, risk premia in equities and peripheral Eurozone bonds were reduced by comments from the European Central Bank. Once again, the cycle of economic and market stress has been met by intervention from major central banks.