UBS: Global Perspectives
Japan was among the weakest performers in conditions of contracting economic growth despite the Bank of Japan’s (BoJ’s) commitment to accommodative monetary policy. In the eurozone, Italian equities underperformed the broader market primarily due to the FTSE MIB Index’s high exposure to banks.14.03.2016 | 11:42 Uhr
Global equity markets regained some composure in February after a dismal start to the year. Equities and the global oil price began to trend upwards in the second week of the month due to a confluence of factors that served to support sentiment. These included tentative signs of oil producers’ willingness to limit supply, a return of confidence in the health of the global banking sector and easing concerns about a China-led global growth slowdown.
Despite the positive turn, sentiment remained highly fragile. The relatively muted impact on markets of the latest bout of easing by the BoJ added to fears that the effectiveness of central bank quantitative easing was diminishing. In the UK, the debate on the country’s membership in the European Union (EU) gathered momentum. The British pound weakened significantly against the euro and the dollar amid uncertainty about the outcome of the June referendum and its impact on investor perceptions of the safe-haven characteristics of many UK assets.
In the US, fourth-quarter GDP growth was revised upwards to 1.0% from the advance estimate of 0.7%. While consumer consumption has continued to support US economic expansion, some signs that weakness in the manufacturing sector may be spreading to services weighed on sentiment. The US corporate earnings season in the fourth quarter was sluggish, with profit growth constrained by continued dollar strength and the relatively weak oil price. Eurozone data, meanwhile, was broadly supportive of further monetary easing by the ECB in March. Eurozone annual inflation was expected to have fallen to -0.2% in February from 0.3% in January. Meanwhile, the rate of growth in the eurozone manufacturing sector continued to slow in February, with German manufacturing activity expanding at the slowest pace in over a year, according to Markit.