Quarterly report
Returns diverged in a shifting monetary landscape
Many APAC markets began monetary easing alongside the US, while markets such as Australia and India kept on hold. China’s fixed income, equity and FX rallied, driven by large-scale stimulus, while Japan experienced declines across these assets. Performance diverged in equities, fixed income and FX across APAC markets over 3M, ending October 31, 2024.
Key highlights:
- Over the last three months, APAC saw variation in asset performance, largely influenced by diverging monetary policies across the region. Government bond returns were strongest in Thailand and Indonesia amid their rate-cutting cycle. Equity performance was mixed. Japan, Korea and Taiwan, which have a higher correlation with US equities, underperformed the region in August following the August 5th sell-off. Taiwan, however, rebounded afterwards as fundamentals for AI-related tech demand remained solid. China and Hong Kong advanced significantly driven by significant monetary easing.
- Japan faced economic and political uncertainty, including slowing inflation and doubts as to whether real wage growth can sustain its positive trend. USD/JPY dipped to the 140 level but rebounded back above 150, driven not only by a stronger USD but also market expectation for delayed rate hikes by the BoJ (Bank of Japan).
- In Australia, upside risks to inflation continued to be a major concern for the RBA (Reserve Bank of Australia), while in New Zealand, the RBNZ (Reserve Bank of New Zealand) cut rates in anticipation of inflation moderating to the target range.
- China’s economic outlook remained uncertain as data such as credit growth and property investment remained soft. Inflation also remained low. Equities outperformed the region boosted by extensive stimulus. Consumer Discretionary, Technology and Financials stocks were the main contributors to the positive return.
- Tech stocks continued to drive Taiwan equity outperformance. In contrast, Korea equity lagged, dragged by Telecom. Korea’s bond curve steepened as the BoK eased. ASEAN markets shifted focus from inflation control to economic growth, with Indonesia, Thailand and Philippines cutting rates. Thailand equities led ASEAN gains.
This report, published quarterly, delves into the major macroeconomic, fixed income, equity and FX market events shaping the APAC financial markets, leveraging our exclusive databases and platforms such as FTSE Russell indices across asset classes, LSEG Workspace, Lipper fund flows and many more.
From key market movements to emerging trends, this report provides insights on how those critical drivers impact different asset classes across individual APAC markets. This report also discusses the interplay between the APAC markets and global events, helping navigate the complexities of today’s financial world.
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