Despite a positive start to the quarter with a strong relief rally in July, equity and bond markets fell through the end of August and September to register a third successive negative quarter for investors. As inflation remained high across developed markets, central banks continued to tighten monetary policy, with the Federal Reserve (Fed), Bank of England (BoE) and European Central Bank (ECB) all hiking rates.
Global equities fell 6.6% in US dollar terms over the quarter, with investors pricing in the ongoing expectation of higher interest rates for longer. Emerging markets broadly underperformed their developed counterparts. The prospect of higher rates weighed heavily on fixed interest assets, with global bonds falling 7.3% as tighter policy continued to be favoured over support for growth.
