Equities

All major US indices hit record highs, buoyed by a strong end to Q3 earnings season, as well as dovish rhetoric from the US Federal Reserve (Fed). European indices were also boosted by strong earnings and a supportive central bank. Japanese equities responded positively to a win for the ruling party of Prime Minister Kishida, while China underperformed, on continued weakness in the property sector.

Bonds

US Treasury bond yields fell, and prices rose, as the Fed confirmed its ‘patient’ approach to monetary policy tightening. Investment grade corporate bond yields fell closer to government bond yields, while a similar dynamic was seen in the high yield sector.

Currencies

Sterling dipped against all majors, as the Bank of England left interest rates unchanged, while the yen gained ground across the board. The euro improved against the US dollar, despite assurances from the European Central Bank that interest rates were unlikely to rise in 2022.

Commodities

Oil slipped from recent highs, as the Biden administration raised the prospect of releasing strategic reserves. Gold rose 2% on the week.

Responsible investing

At the UN Climate Change Conference, or COP26, world leaders pledged action on deforestation, as well as methane and coal production. The International Energy Agency estimated these pledges could limit the rise in global temperatures to 1.8˚C from their previous estimate of 2.7˚C.