1H October Global Market Summary
1st October 2020 – 15th October 2020
While the global economy is continuing to recover, economic activity in most countries remains well below pre-pandemic levels. China was the first major country to take dramatic moves to combat the virus through the early implementation of strict lockdown rules. As a result, Chinese equities have been one of the best performing markets this year. China stocks posted a weekly gain after the golden week holiday, buoyed by fresh policy support and robust data that pointed to an economic recovery from the pandemic fallout. Uncertainties remain with upcoming election and little sign for a quick end to the stalemate over fresh fiscal stimulus in US.
Across the various U.S. treasury tenors, yields have risen during the first half of October. Chinese government bond yields have climbed sharply across the board. Vietnam’s ten-year government bond index fell by 21.9bps, its second largest drop since the March equity market crash. CDS spreads have continued to narrow since the recent uptick in September, which is only the second time that spreads have widened since the huge widening back in March.
Major commodities appreciated in the first half of October except US Gasoline mainly due to the depreciation of the USD. Oil, together with Gold and Silver prices have started to trend downwards after their peak in August. Natural Gas prices has seen a new high set in October, after the previous peak which was back in August. Wheat and corn prices soared with concerns over global supply reductions due to the dryness in the United States and Black Sea region.