![Monthly%20Market%20Roundup%20PDF%20March](/content/dam/invesco/emea/en/insights/MMR_MarchPDF2024.jpg)
Monthly Market Roundup cov. March
In our monthly market roundup for March, Invesco experts give a rundown on a positive month for global equity markets, as well as an update on fixed income markets.
European equity markets closed Q1 at new highs in March, supported by strong economic data and central bank easing expectations.
The Bank of England expects inflation in the UK to fall slightly below its 2% target in the second quarter of the year.
Manufacturing is a bright spot for the region with activity expanding in Mexico and Brazil.
March saw global equity markets gain ground, with Europe, the US, and the UK all showing positive movements. However, UK inflation fell to 3.4% in February, its lowest level since September 2021, surpassing consensus estimates. The Bank of England (BoE) predicts further declines in inflation due to falling energy costs. In Asia Pacific, Taiwan and Korea performed strongly, followed by Japan.
European equity markets closed off a strong quarter, setting new highs in March. This was supported by strong economic data and the expectation that central banks will soon start cutting interest rates. Key sectors like financials and energy outperformed, while technology lagged.
The European Commission Economic Sentiment Indicator (ESI) rose to 96.3, in line with forecasts, showing improved confidence in industry, services, and retail. Eurozone composite purchasing managers’ index (PMI) hit a nine-month high of 49.9. A number above 50 indicates that businesses are growing.
The Swiss National Bank (SNB) surprised markets with a 25-basis points interest rate cut to 1.50%, weakening the Swiss franc, making it the first to cut rates. The European Central Bank (ECB) plans to assess wage pressures in June before taking any action, despite expected inflation easing in March.
The UK equity market closed higher in March, with the FTSE 100 hitting a 12-month high. After falling into recession in late 2023, The Office for National Statistics (ONS) showed the UK economy grew in January, driven by a 0.2% rise in Gross Domestic Product, from the services sector.
UK inflation dropped to 3.4% in February, the lowest since September 2021, surpassing forecasts. The Bank of England (BoE) held interest rates at 5.25%, expecting inflation to dip below 2% by the second quarter of the year, with markets anticipating rate cuts from June.
Wage growth slowed to 5.6% annually, and Chancellor Jeremy Hunt introduced a 'Budget for long-term growth,' including tax reductions and investment incentives. Consumer confidence remained stable despite some inflation concerns.
Equity markets in the US finished March up, with all three major indices - S&P 500, Nasdaq, and Dow Jones advancing to close out a strong quarter.
Investor sentiment improved thanks to, among other things, the prospect of lower US interest rates. US Federal Reserve (Fed) Chair Jerome Powell's early March testimony indicated that interest rate cuts could be imminent.
February's consumer price index inflation of 3.2% slightly exceeded economists' 3.1% forecast, while the core PCE price index matched expectations at 2.8%.
Asia Pacific equity markets had a positive month, led by Taiwan and Korea, followed by Japan. The information technology and financial sectors performed well. Chinese markets saw gains and it’s consumer price index rose to 0.7%, allaying deflation concerns.
Korea's markets advanced, propelled by information technology and healthcare sectors, with the Bank of Korea forecasting 2.1% economic growth for 2024. Taiwan's markets thrived on strong IT company performance, with GDP up by 4.9% year-on-year.
Japan's stocks rose as the yen weakened and the export heavy industrials sector benefited.
Australian stocks gained ground, led by financials and materials, amid ongoing economic challenges.
Emerging equity markets had a positive month, with Asia leading as the strongest performing region driven by Taiwan and Korea. Latin American equities lagged, with Brazil declining. The economy showed resilience though, despite high interest rates.
China's equity markets had a positive month with communication services and materials sectors leading, although healthcare sectors detracted.
In India, the equity market made marginal gains after coming under selling pressure early in the month, the information technology sector had a particularly challenging time. However, the Indian economy is still robust.
March saw positive performance in fixed income markets, as government bonds rallied amid growing anticipation of impending interest rate cuts. US treasuries returned 0.60%, German bunds gained 0.95% and UK gilts were up 1.81% (local currency terms, ICE BofA data).
Eurozone inflation slowdowns increased expectations for European Central Bank rate cuts by June. The S&P composite purchasing managers’ index, indicating euro area business activity, reached a nine-month high of 49.9.
Corporate bonds also performed well, supported by narrower spreads, with US credit spreads hitting a two-year low. However, high yield credit spreads both fell to their lowest levels in two years.
Monthly Market Roundup cov. March
In our monthly market roundup for March, Invesco experts give a rundown on a positive month for global equity markets, as well as an update on fixed income markets.
Yields remain attractive and may maintain positive relative value
Significant focus on the uncertainty of the US macroeconomic backdrop and its potential implications on the market remain top of mind for investment opportunities. Against this cautious outlook, we asked the experts from Invesco’s bank loan, direct lending and distressed credit teams to share their views as the third quarter of 2024 wraps up.
Private credit: A case for senior loans
As we continue in 2024, there has been a significant focus on the uncertainty of the US macroeconomic backdrop and its potential implications for the senior secured bank loan market. Despite these challenges, we see three compelling reasons to consider investing in senior secured loans now.
Monthly fixed income update
Fixed income markets in July saw yields rally in response to weaker economic data which brought forward expectations of rate cuts. Read our latest thoughts on how fixed income markets performed during the month and what we think you should be looking out for in the near term.
Global Fixed Income Strategy Monthly Report
In our regularly updated macroeconomic analysis we offer an outlook for interest rates and currencies – and look at which fixed income assets are favoured across a range of market environments.
Impact investing: climate adaptation and transition in a changing world
If we are to live more sustainably by 2030, the Climate Policy Initiative estimates that US $4.3 trillion will be needed annually. Climate adaptation and transition projects are helping, but more finance is needed. Find out more.
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
All information is provided as 31 March 2024, sourced from Invesco unless otherwise stated.
This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. Views and opinions are based on current market conditions and are subject to change.
EMEA 3498997