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  • Writer's pictureAcinox Insights

Around the globe: Q3 multi-asset review

Updated: Nov 15, 2019


US: Payroll data was in-line with expectations for July but disappointed for August. The ISM manufacturing index dropped below 50 in August for the first time in 3 years. However services, and non-manufacturing beat expectations in August.

China: Data is pointing towards slowing growth momentum, although in July PMI manufacturing index rose but edged back down as trade tensions escalated again. Services fell in both July and August as softer global demand weighed in.

Eurozone: Aggregate manufacturing PMI remained contractionary during the quarter. September PMIs were worse than expected, as composite PMI slipped to 50.4 as services and manufacturing both dropped with Germany's manufacturing index fell to its lowest level in over a decade.


The focus was on Brexit negotiations, particular with the new UK PM Boris Johnson. Otherwise, US-China trade tensions also remained a key concern, with various twists and turns throughout the quarter.

Central Banks

Central banks across the globe loosened monetary policy im response to missing inflation targets, slowing global growth and geopolitical concerns. The Fed cut rates by 25bp in both July ans Sep while the ECB delivered a collection of easing measures, including a 10bp deposit rate cut and an open-ended QE. The PBoC also cut its RRR and targeted RRR.


Global equities had a mixed Q3. July was choppy; while equities were up in the month, the performance was mixed across sectors and regions. August then brought a broad-based sell off which saw global equities fall 5.6% through to mid-August as trade tensions peaked. However, gobal equities bounced back through the rest of the quarter before falling again towards the end of September.

Overall EM equities underperformed vs DM equities, with Japan being the strongest performer in DM towards the second half of the quarter as trade optimism supported Japanese equities. Otherwise defensive sectors outperformed cyclical sectors for most of the quarter. In the US, utilities and consumer staples outperformed sectors like energy and healthcare.


USD gained ground again in Q3 versus most EM currencies and its G10 peers, with the exception of JPY. Global growth slowdown vs better than expected US economic data helped the cause, while JPY outperformed thanks to its safe haven status. EUR performed thr worse among G10 currencies, as poor macroeconomic data continued to flow through. In EM, USD-RMB broker the 7.0 mark for the first time since 2008, while most EM currencies posted losses versus USD.

Fixed Income

DM sovereign bonds rallied in Q3 driven by global central bank easing, trade concerns and fears of global slowdown. While some of the gains were lost during the sell-off in September, in total DM sovereign bonds returned 2.2% during the quarter. 10Y US treasuries closed 30bp lower, while German bunds and hit record lows. Italian sovereign bonds sustained a large rally on the back of positive political developments and ECB stimulus.

Credit spreads saw little change in Q3 despite increasingly easing monetary conditions, yet they broadly moved in tandem with equities. EUR and USD IG spreads widened by 8bp and 21bp, respectively, while EUR HY widened by just 1bp and USD HY were flat.


Oil prices were under pressure in Q3 due to intensifying geopolitical tensions, concerns over the demand outlook and strong US supply. Im September, oil prices spiked sharply following an attack on key Saudi production facilities that wiped 5% of global oil supply, but was restored by September end causing oil (WTI) finishing quarter with 4.6% lower.

Gold performed strongly in Q3 as real yields fell across major DM sovereigns gaining 5.5% over thre quarter. Having remained steady for most of July, gold rose above USD1550/oz taking year to date gains arounf USD270/oz. This can be attributed to its traditional safe haven status which escalated during trade tension and looming recession concerns.

S. Khan

Head of Investment Research

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