Monthly Market Returns – October

Equity markets were largely negative over October as stock markets sold off amid further spreading of the coronavirus and investor jitters in relation to the outcome of the US election. As a number of countries recorded their highest daily coronavirus cases during October new localised lockdown measures were put in place. Global equities, as measured by the FTSE World Index, were down -2.3% in euro terms for the month taking the YTD return to -5.3%.

As investors tried to grapple with new lockdown restrictions, yields on Eurozone bonds moved lower yet again. The German 10-year bond yield ended the month at -0.62% p.a. another 0.10% lower over October. The noteworthy rise in Treasury yields in the month was driven by a sell-off in US government bonds on the expectation that the Democrats will have a clean sweep winning the most prestigious US role and take control of both houses of Congress. The US 10-year Treasury yield ended October 0.18% higher at 0.86% p.a.. The coming weeks are sure to be interesting for investors in both equities and bonds as the results of the US election feed through. Will the polls get it right this time?