Monthly Market Roundup covering January 2022 - Invesco
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Monthly Market Roundup
covering January 2022
This marketing communication is exclusively for use by Professional Clients, Financial
Advisers and Qualified Clients/Sophisticated Investors. This is not for consumer use,
please do not redistribute.
• Global markets generally made a slow start to 2022, lagging
the previous month’s performance.
Overview
• The US Federal Reserve maintained a hawkish stance
(meaning the tightening of monetary policy) and laid
out the possibility of rate hikes at all seven Federal Open
Market Committee meetings this year. This news negatively
impacted global markets.
• The unfolding Russia-Ukraine conflict raised a geopolitical
risk and affected sentiment in Europe.
Global markets have suffered a slow start to 2022. Concerns over record inflation (in some
regions), the pandemic and now a potential political conflict have impacted performance.
In this month’s monthly market roundup, we look at the major events in the six markets we
cover and how each fared.
Europe
Continually rising inflation and a hawkish (tightening of monetary policy, which aims to
curb the inflationary environment) stance from the European Central Bank (ECB) saw
European shares end January lower. The big news story is that of the increasing tensions
between Russia and Ukraine, which presents a geopolitical risk to the region. While
Germany and Austria contracted, quarter-on-quarter growth in Spain, Italy and France
provided some balance. Inflation hit a record high in the euro area and sentiment is that
the ECB will need to reduce monetary stimulus to help control it.
The UK
30-year record high inflation was the story in the UK, and the main driver behind the
market’s underperformance in January. This put pressure on the Bank of England (BoE)
to raise interest rates again. However, more positive news was that the economy grew to
pre-pandemic levels for the first time in November. The IHS Markit/Cips UK purchasing
manager index (measure of manufacturing and services activity) remained above the
magic number of 50, which indicates growth from the previous month.
01 Monthly Market Roundup February 2022The US
The Federal Reserve’s (Fed’s) hawkish stance meant that US markets retreated in January.
It touched on the possibility of interest rates hikes at each of the seven meetings of the
Federal Open Market Committee (FOMC) this year. The news impacted markets around
the world and prompted a sell-off. Headline inflation reached its highest level in 40 years
and the Nasdaq composite had its worst month in two years. While annualised GDP
comfortably beat forecast, concerns over the unfolding tension with Russia impacted
sentiment.
Asia
A promising start was pegged back by the anticipation of higher interest rates. The Fed’s
announcement caused contagion in Asian markets, with the likelihood of faster and
stronger tightening of monetary policy. A market rotation from high-growth technology
companies impacted the likes of Taiwan and Korea while China reported a mixed-bag of
macroeconomic data. Equity markets in Australia, India and Japan also lagged.
Emerging Markets Emerging Markets
Despite registering negative returns, emerging markets significantly outperformed
developed markets. A strong start to the year was again undone by the Fed’s hawkish
stance. Latin America led the way, buoyed by strong performances in the commodity-
driven markets of Brazil, Chile and Peru. Europe, Middle East and Asia followed, with Asia
bringing up the rear. The Russia-Ukraine conflict continues to impact markets. There
are concerns over the fact that Russia controls a significant portion of western Europe’s
energy supply. On the other side, potential sanctions that could be imposed on the
country are of concern for the Kremlin.
Fixed Income
With interest rate hikes almost a certainty now, this put bond markets under increased
pressure. It made for a difficult month in this sector. There was negative sentiment over
the additional interest rate hikes announced by the Fed, with the markets pricing in five,
up from the three expected in December. Seven (at each of the meetings of the FOMC)
are now possible in 2022. 10-year treasury yield (which moves inversely to price) went up
as did gilt yields and 10-year bund (now in positive territory for the first time since 2019).
It was a negative month for corporate bonds, given their sensitivity to movements in
government bond yields. Investment-grade bonds lost ground while higher quality (AAA-
rated) corporate bonds nursed the biggest losses.
02 Monthly Market Roundup February 2022• Confirming its hawkish stance, the Federal Reserve’s
US indication that interest rate rises could be consistent
across the year spooked markets around the world.
• Despite this, headline inflation hit the highest level in 40
years at 7% year-on-year (YoY).
• Tensions with Russia escalated, with the US in a position
to apply serious sanctions against the Kremlin. Likewise,
Russia holds the keys to significant parts of the West’s
energy supply.
US equity markets retreated significantly as the Federal Reserve (Fed) reaffirmed its
hawkish stance (greater likelihood of tightening of monetary policy). Fed Chair Jerome
Powell touched on the possibility of interest rate raises occurring at every Federal Open
Market Committee (FOMC) meeting in 2022. There are seven meetings this year. This
potential increase from the three rate hikes previously discussed in December provoked
a sell-off across global markets. Central banks were placed under more pressure to follow
suit.
The Nasdaq composite registered its worst month in almost two years. US technology
names underperformed on the back of expected rising interest rates and a surge in US
treasury yields. The US dollar outperformed all its G10 peers in January, after Fed Chair
Jerome Powell’s hawkish tone raised expectations for more frequent and potentially larger
interest rate hikes this year.
US headline inflation soared to the highest level since 1982, reaching 7.0% YoY in
December. This was in line with consensus expectations and triggered hawkish remarks
from various Fed officials. On 26 January, the Fed kept interest rates unchanged in
its meeting which mostly met market’s expectations. That said, the FOMC statement
indicated that an interest rate hike would “soon be appropriate”.
The US dollar struggled initially to gain positive momentum. But Chair Powell’s hawkish
tone during his press conference, where he endorsed a March rates lift-off opened the
door for interest rate hikes to occur at every meeting. It triggered a jump in short-term
yields and helped the DXY (US Dollar Index Spot Rate) climb above 97.0, the highest since
mid-2020. However, some positive data late in the month helped spark a small recovery in
equity markets. Annualised GDP registered at 6.9% quarter-on-quarter, tripling Q3’s figure
(2.3%) and beating forecasts comfortably.
Sentiment also waned as tensions between Russia and the US escalated. The threat of an
invasion into Ukraine seemed more likely despite negotiation efforts. Russia want Nato to
stop its eastward advance and is determined to prevent Ukraine from joining the western
military alliance, seeing it as a major security threat. While talks continue, there remains an
underlying threat of sanctions on both sides.
The monopoly of a large portion of the West’s energy supply remains possibly the greatest
weapon in Russia’s arsenal. At the same time, sanctions on Russia’s oligarchy and the risk
of being cut off from the international financial system present a major deterrent to Putin
and the Kremlin.
03 Monthly Market Roundup February 2022• The possibility of higher interest rates (coming from the
Asia Federal Reserve) tanked a positive start for Asian markets.
• A technology sell-off also impacted performance for the
likes of Taiwan and Korea.
• Chinese macroeconomic data showed a mixed picture
and the central bank trimmed interest rates to combat
slowing economic growth.
In line with other regions, Asian equity markets fell. Initial gains were undone as investors
braced for a higher interest rate environment. The likelihood of faster and stronger
tightening of monetary policy (interest rate rises and ending of asset purchasing) from the
Federal Reserve (Fed) caused contagion across most Asian markets, given the inflationary
backdrop.
Chinese equities slipped as the Fed’s Federal Open Market Committee (FOMC) meeting
reaffirmed a hastier timeline for interest rate hikes and the tapering of their quantitative
easing programme. This would limit the room for monetary policy easing in China.
Macroeconomic data came in mixed, with industrial production growing solidly (+4.3%
year-on-year (YoY)), steady trade activity and a small increase in retail sales (+1.7% YoY).
The manufacturing Purchasing Manager’s Index (PMI) was broadly in line with forecasts
and December consumer prices registered lower. The People’s Bank of China trimmed
interest rates to try to boost a slowdown in economic growth. This was after Q4 GDP came
in at 4.0%, compared to 4.9% in the third quarter of 2021. Sentiment was also impacted by
a surge in local Covid-19 infections, with the country’s zero tolerance policy showing no
signs of easing.
Taiwan equity markets had a seesaw month. They started off strongly but were later
dragged down as investors priced in the Fed’s hawkish (tightening of monetary policy)
stance and the likely rise in interest rates. Macroeconomic indicators were broadly
positive however: YoY GDP picked up more than expected, industrial production beat
forecasts, and headline YoY inflation was softer than forecasted.
Technology names were out of favour in January as we saw a market rotation from high-
growth tech companies to a more value and cyclical2 bias, much to the detriment of
Korea’s tech-heavy equity markets which fell significantly. Having said that, some positive
economic data signalled a favourable outlook. Industrial production far surpassed
forecasts, coming in at 6.2% YoY. Retail sales YoY also picked up nicely and in the fourth
quarter GDP beat consensus, registering a 4.1% annualised growth (vs. 4.0% in the third
quarter). The unemployment rate did pickup more than expected though.
Indian equities also declined. This was despite muted Covid concerns as cases surged
but hospitalisations remained low. Macroeconomic data painted a mixed picture. CPI
registered at 5.6% (increasing from November’s 4.9%) and industrial production was
muted relative to consensus. The Markit Manufacturing Purchasing Managers Index1 data
dipped slightly, indicating a slowdown in economic expansion.
In line with global markets, Japanese equities retreated as consumer prices increased at
the fastest pace in almost two years. Headline CPI reached 0.8% and retail sales dropped
to 1.4% YoY, underperforming forecasts. Annualised industrial production also lagged,
coming in at almost half that of November’s reading (2.7% vs 5.1%).
Equity markets in Australia were also stunted by the hawkish tone expressed by the
Fed. Macroeconomic data came in mixed: consumer prices rose YoY, with headline CPI
registered at 3.5%. The labour market continued to recover though, as unemployment fell
to 4.2%, beating consensus. Despite this, forecasters predict that the Reserve bank will
resist pressures to hike interest rates all year.
IIndustrial production far surpassed forecasts, coming in
at 6.2% YoY. Retail sales YoY also picked up nicely and in
the fourth quarter GDP beat consensus, registering a 4.1%
annualised growth (vs. 4.0% in the third quarter).
04 Monthly Market Roundup February 2022• A strong start to the month for emerging markets (EM)
Emerging
Markets
was undone by the confirmation of a more hawkish
stance by the Federal Reserve.
• Latin America (LatAm) led the way, boosted by strong
performance of commodity markets in Brazil, Chile and
Peru.
• Europe, Middle East and Africa (EMEA) was impacted
by the unfolding Russia-Ukraine situation, but still
outperformed EM Asia.
Even though they also posted negative returns, emerging equity markets outperformed
developed markets significantly.
EM began the month strongly, although gains were undone after the Federal Reserve’s
(Fed) hawkish stance (greater likelihood of tightening monetary policy) was reaffirmed in
their January Federal Open Market Committee (FOMC) meeting.
LatAm was the strongest region, followed by EMEA, with EM Asia lagging. Commodity-
driven markets performed the strongest, namely Brazil, Chile and Peru, while Korea, Russia
and Mexico were the biggest detractors to performance in the region.
Brazil’s outperformance was supported by stronger than expected macroeconomic
data. It was also a solid month for the Brazilian real, which was buoyed by strengthening
commodity prices, notably iron ore. Markets also seemed less reactive to the general
elections run-up (set to take place in October this year). Former president and current
candidate Lula da Silva reassuring that he will be seeking a broad alliance, a move which
was well received by investors.
Chile meanwhile benefitted from rising copper prices underpinned by healthy global
demand, despite the number of Covid-19 cases increasing by 72% in one month. Mexico
lagged considerably, in line with its neighbour, the US, as its telecommunications sector
took a hit. Production indicators remained muted as supply chains continued to hinder
industrial production.
EM Asia fell as Korea, China and Taiwan saw its equity markets eroded by news of the Fed’s
likely implementation of an increasingly faster interest rate cycle. Market rotation away
from growth stocks, namely technology was also a factor. China’s declining economic
growth and a surge in local Covid-19 infections concerned investors. However, the
People’s Bank of China attempted to address this by trimming interest rates to boost its
slowing economy. With both heavily positioned in the technology sector, Taiwan and
Korea’s equity markets were particularly hurt by the technology sell-off.
The major news story in Eastern Europe came from Russia. It accused Nato of moving
alarmingly eastward and opposes the inclusion of Ukraine into the organisation. It has
since placed approximately 100,000 troops near the Ukrainian border. Markets reacted
badly to the potential threat of war, though increasing discussions between the US and
Russia are taking place in the hope of de-escalating tensions.
It would be in the best interest of both parties to come to a diplomatic agreement, with the
US in a position to impose serious sanctions. These include targeting Russia’s economic
elite, oligarchs, and their money currently held in the west and cutting Moscow out of the
international financial system (namely the global payment system, Swift). It could also halt
technology exports to Russia and stop the Nord Stream 2 gas pipeline between Russia and
Germany. This would deliver a significant financial blow to Moscow, albeit at the economic
detriment of Germany.
However, with Moscow supplying approximately 40% of Europe’s gas, the ball is also
in their court. As a result, energy prices climbed higher, and Brent crude surpassed the
$90 mark for the first time in seven years. This led to the outperformance of all major
oil producing countries and regions, namely Brazil, the Middle East, north Africa and
Colombia, with the obvious exception of Russia.
Iron ore experienced a similar surge in prices, with nickel also strengthening significantly.
Steel prices dropped considerably though, and gold slipped slightly on the hawkish
interest rate message from the Fed.
05 Monthly Market Roundup February 2022• The escalating Russia-Ukraine situation has presented a
Europe new geopolitical risk in the region
• Spain, France and Italy welcomed quarter-on-quarter
growth, while Germany and Austria lagged
• Rising food and energy prices sent inflation soaring to a
record high in December
European shares ended lower in January amid soaring inflation and hawkish sentiment
from the European Central Bank (ECB). There was also increasing geopolitical risk
stemming from the Russia-Ukraine standoff. From a style and sector perspective, Growth
stocks, information technology, underperformed the most against a backdrop of rising
bond yields. On the flip side, cyclical2 and so-called Value sectors (e.g., energy, financials)
fared the best.
The eurozone economy grew by 0.3% in the fourth quarter of 2021, in line with
expectations. For the year, it returned to its pre-pandemic level of output. Contractions
in Germany and Austria were offset by quarter-on-quarter growth in countries including
Spain, France and Italy. France grew at 7% in 2021, the country’s fastest expansion for 52
years. Spain’s total gross domestic product remained below pre-pandemic levels, despite
growing by 5% in 2021, its fastest rate since 2000. Germany’s fourth-quarter contraction
left its output 1.5% below pre-pandemic as it has been hit by greater exposure to supply
chain bottlenecks and a weaker recovery in household spending.
The IHS Markit flash eurozone composite purchasing managers’ index1 (PMI) slowed more
than most economists expected to 52.4, down from 53.3 in December. Nevertheless, a
figure above 50 indicates that the majority of businesses are reporting higher activity
levels than a month ago. Tightened Covid-19 restrictions have weighed on demand,
particularly in the consumer-facing and hospitality sectors. But high-frequency data
shows Omicron is causing less damage to the European economy than previous waves of
Covid-19.
Eurozone inflation rose to 5% in December, a record high since the single currency was
created. This was mainly driven by increasing energy and food prices in the region. The
unexpected rise is likely to pressure the ECB to reduce its monetary stimulus quicker than
planned.
Germany’s 10-year bond yield, a benchmark for borrowing costs across the eurozone, was
above zero for the first time since 2019. Investors are betting that central banks will need
to withdraw stimulus measures to slow inflation.
In Italy, Sergio Mattarella was re-elected president, ending a political stalemate.
Mattarella’s re-election avoids a potentially messy presidential election that could have
derailed Prime Minister Mario Draghi’s national unity government. In Portugal, António
Costa’s Socialist party (PS) will press ahead with plans to increase spending on pensions
and health and lift the minimum wage. This after securing a resounding election victory.
They’ll now have access to EU recovery funds which could boost GDP.
The eurozone economy grew by 0.3% in the fourth quarter
of 2021, in line with expectations. For the year, it returned to
its pre-pandemic level of output.
06 Monthly Market Roundup February 2022• UK economy back above pre-pandemic level for the first
UK time in November
• Inflation hit its highest level in 30 years
• While economic activity growth slowed, chief financial
officers of some of the UK’s largest companies are
optimistic about growth in 2022
The UK equity market ended lower in January as stocks experience a turbulent start to
the new year. There are fears over interest rate hikes, a continued rise in inflation and
geopolitical tensions in Ukraine driving stocks lower.
The UK economy grew to above its pre-pandemic level for the first time in November.
Figures from the Office of National Statistics (ONS) showed that output rose 0.9 per cent
between October and November. This was higher than consensus estimates of 0.4 per
cent. Growth came from all sectors with construction rebounding by 3.5 per cent, the
fastest monthly rise since March 2021.
British retail sales contracted more than expected in December as Covid-19 infections and
restrictions tanked consumer spending. ONS data showed retail sales in Great Britain fell
3.7 per cent between November and December. Businesses welcomed the government’s
decision to lift most coronavirus restrictions in England. The move aimed to boost city
centres, consumer confidence and in particular the hospitality and retail sectors.
UK inflation hit a 30-year record high of 5.4 per cent in December, ONS data showed. The
rate of inflation is expected to push even higher in spring when the energy price cap is to
increase by potentially 50 per cent. This puts further pressure on the Bank of England to
raise interest rates again as the cost of living continues to squeeze households.
UK economic activity growth slowed in January, according to the flash IHS Markit/Cips UK
composite purchasing manager index (PMI). This is likely down to the rise in the Omicron
variant. The measure of manufacturing and services activity dropped to 53.4 from 53.6
in the previous month. A figure over 50 still represents growth from the previous month
though.
A Deloitte survey of chief financial officers of 85 large UK businesses, showed businesses
are planning to expand operations and increase investment in 2022. executives were
keener to invest in 2022 more than in any other year since it began to ask the question
in 2009. The surveys suggest UK companies are entering 2022 with greater optimism.
They’re expecting strong consumer demand to provide a robust year of growth. Concerns
about labour shortages and declining links to the EU due to Brexit were identified as the
key risks.
Meanwhile, sterling climbed to its strongest level against the euro in nearly two years. It
also hit a near three-month high against the US dollar.
UK inflation hit a 30-year record high of 5.4 per cent in
December, ONS data showed. The rate of inflation is
expected to push even higher in spring when the energy
price cap is to increase by potentially 50 per cent.
07 Monthly Market Roundup February 2022• Bond markets are under pressure with central banks
Fixed
Income
primed for interest rate hikes as inflation rates continue
to surge.
• Growing expectations that the US Federal Reserve could
pull the trigger on a series of hikes in 2022.
• Negative month too for corporate bonds as yields rise
and spreads widened3.
Bond markets started the year on a weak footing as investors braced themselves for
a more aggressive pace of interest rate hikes in 2022. With inflation rates surging to
multi-year highs in Europe and the US, negative sentiment was driven by the more
hawkish (tightening of monetary policy) message from the US Federal Reserve (Fed). In
December, Fed funds futures were pricing in three US interest rate hikes in 2022. By the
end of January financial markets were pricing in five US hikes. Furthermore, Fed Chair
Jerome Powell refused to rule out the prospect of tightening at every meeting (seven are
scheduled) for the remainder of the year.
Against this backdrop, the yield (which moves inversely to price) on 10-year treasuries
increased from 1.51% to 1.78%. Gilt yields rose with the 10-year note moving from 0.97% to
1.30%. For the first time since 2019, 10-year bunds moved into positive territory, closing at
0.01% after starting the month at -0.18%.
It was also a negative month for corporate bonds. Given their sensitivity to movements in
government bond yields, investment-grade corporate bonds lost ground. Higher quality
(AAA-rated) corporate bonds nursed the biggest losses. The month also saw a widening in
spreads (the additional yield over government bonds) with those for sterling-denominated
bonds increasing from 115 basis points (bps) to 124bps. The spread for euro and US dollar-
priced bonds widened from 98bps to 107bps and 98bps to 110bps respectively.
A similar outcome unfolded in the high-yield market with bonds denominated in sterling,
euros and dollars all registering negative returns. In terms of spreads, sterling bonds
widened from 390bps to 402bps, euro ones increased from 331bps to 367bps and those
priced in dollars moved from 310bps to 363bps.
On the economic front, US annual inflation rose to 7% in December, its highest reading
since 1982. While US jobs growth slowed sharply with just 200,000 positions being
created in December, the unemployment rate fell to 3.9%. With Americans quitting their
jobs in record numbers, the ratio of job seekers to job openings has fallen to an historic
low and labour shortages have grown more acute. The tight labour market has led to
higher wage costs and a rise in average hourly earnings.
UK inflation rose faster than expected to 5.4% in December. Higher food and fuel prices
were the main factors pushing up the cost of living. A surge in cases of Omicron had a
negligible impact. After being the first major central bank to raise interest rates since
the start of the Covid-19 pandemic, the Bank of England is under pressure to hike again.
According to the Office for National Statistics, the UK economy surpassed its pre-
pandemic level for the first time in November although activity slowed down ahead of
year-end as Omicron took hold.
Following the release of inflation data for the eurozone - the cost of living rose to 5.1% in
January, overshooting expectations. The European Central Bank (ECB) came under more
pressure to rein in their policy of ultra-low interest rates. But for now at least, the ECB
appears to be in no rush to hike interest rates.
08 Monthly Market Roundup February 2022Government Bonds Yield to maturity1 (%)
Current 1 month 3 months 6 months 12 months
US Treasuries 2 year 1.18 0.73 0.50 0.18 0.11
US Treasuries 10 year 1.78 1.51 1.55 1.22 1.07
US Treasuries 30 year 2.11 1.90 1.93 1.89 1.83
UK Gilts 2 year 1.05 0.69 0.71 0.06 -0.11
UK Gilts 10 year 1.30 0.97 1.03 0.57 0.33
UK Gilts 30 year 1.45 1.12 1.11 0.99 0.90
German Bund 2 year -0.53 -0.62 -0.59 -0.76 -0.73
German Bund 10 year 0.01 -0.18 -0.11 -0.46 -0.52
German Bund 30 year 0.28 0.20 0.14 0.02 -0.08
Source: Bloomberg LP, Merrill Lynch data. Data as at 31 January 2022. The yield is not guaranteed and may go down as well as up.
Corporate Bonds Yield to maturity1 (%)/Spread2 (bps)
Current 1 month 3 months 6 months 12 months
£ AAA Investment Grade Corporate 1.91 64 1.54 58 1.41 48 1.09 48 0.83 43
£ AA 2.00 74 1.60 69 1.52 59 1.11 57 0.85 55
£ A 2.27 99 1.89 95 1.85 89 1.48 89 1.32 91
£ BBB 2.87 150 2.42 138 2.36 129 1.97 130 1.85 144
£ High Yield 5.40 402 5.03 390 4.86 368 4.50 371 4.71 439
£ BB 4.37 290 3.97 280 3.81 263 3.40 266 3.42 306
€ AAA Investment Grade Corporate 0.51 69 0.29 64 0.28 54 -0.04 55 -0.08 50
€ AA 0.38 71 0.21 68 0.18 57 -0.11 56 -0.07 60
€ A 0.67 93 0.45 86 0.43 75 0.12 73 0.19 80
€ BBB 1.05 124 0.81 113 0.79 102 0.46 99 0.57 112
€ High Yield 3.63 367 3.23 331 3.23 322 2.88 313 3.15 350
€ BB 2.84 286 2.51 260 2.42 241 2.15 241 2.32 268
European High Yield (inc € + £) 3.83 371 3.43 337 3.40 327 3.05 319 3.30 359
Source: Bloomberg LP, ICE BofA. Data as at 31 January 2022. The yield is not guaranteed and may go down as well as up.
1
Yield to maturity – is the total return anticipated on a bond if the bond is held until it matures.
2
Credit spread – difference in yields offered by corporate bonds over government bonds, that have similar maturity but different credit quality.
Global currency movements – figures to 31 January 2022
Change Over:
Current 1 Month 3 Months 6 Months YTD 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
value (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%) (%)
Euro/US Dollar 1.12 -1.2 -2.8 -5.3 -8.0 8.9 -2.2 -4.5 14.1 -3.2 -10.2 -12.0 4.2 1.8 1.8
Euro/GB Sterling 0.84 -0.7 -1.1 -2.2 -6.5 5.7 -5.9 1.2 4.1 15.8 -5.1 -6.5 2.3 -2.6 -2.6
Euro/Swiss Franc 1.04 0.4 -1.6 -3.1 -3.7 -0.4 -3.5 -3.8 9.2 -1.5 -9.5 -2.0 1.6 -0.7 -0.7
Euro/Swedish Krona 10.47 1.7 5.5 2.7 4.2 -4.3 3.4 3.2 2.7 4.4 -2.9 6.7 3.1 -3.8 -3.8
Euro/Norwegian Krone 10.00 -0.3 2.4 -4.4 -4.6 6.5 -0.6 0.6 8.3 -5.4 6.6 8.1 13.6 -5.2 -5.2
Euro/Danish Krone 7.44 0.1 0.0 0.0 0.0 -0.4 0.1 0.3 0.2 -0.4 0.2 -0.2 0.0 0.4 0.4
Euro/Polish Zloty 4.58 -0.1 -0.6 0.3 0.5 7.2 -0.8 2.7 -5.1 3.4 -0.6 3.2 1.8 -8.7 -8.7
Euro/Hungarian Forint 355.29 -3.8 -1.4 -0.8 -2.0 9.5 3.1 3.3 0.4 -1.9 -0.4 6.5 2.0 -7.5 -7.5
US Dollar/Yen 115.11 0.0 1.0 4.9 11.5 -4.9 -1.0 -2.7 -3.7 -2.7 0.4 13.7 21.4 12.8 12.8
US Dollar/Canadian Dollar 1.27 0.6 2.6 1.9 -0.1 -2.0 -4.7 8.5 -6.5 -2.9 19.1 9.4 7.1 -2.9 -2.9
US Dollar/South African Rand 15.39 -3.5 1.0 5.4 4.7 5.0 -2.4 15.9 -9.9 -11.2 33.7 10.3 23.8 4.7 4.7
US Dollar/Brazilian Real 5.31 -4.8 -5.8 1.9 2.1 29.0 4.0 17.1 1.8 -18.0 49.1 12.7 15.5 9.5 9.5
US Dollar/South Korean Won 1205.90 1.4 3.2 4.8 11.0 -6.0 3.6 4.2 -11.4 3.0 6.7 4.1 -1.4 -7.1 -7.1
US Dollar/Taiwan Dollar 27.83 0.5 0.0 -0.5 -1.7 -5.8 -2.2 3.1 -7.6 -2.1 4.0 6.1 2.6 -3.9 -3.9
US Dollar/Thai Baht 33.30 -0.3 0.3 1.3 11.2 -0.1 -7.9 -0.1 -9.0 -0.8 9.7 0.1 7.4 -3.1 -3.1
US Dollar/Singapore Dollar 1.35 0.2 0.2 -0.2 2.2 -1.8 -1.2 2.0 -7.7 2.0 7.0 4.9 3.4 -5.8 -5.8
US Dollar/GB Sterling 0.74 0.6 1.8 3.4 1.6 -3.0 -3.8 5.9 -8.6 19.4 5.7 6.3 -1.9 -4.4 -4.4
GB Sterling/South African Rand 20.69 -4.1 -0.9 1.8 3.0 8.2 1.3 9.6 -1.3 -25.7 26.5 3.7 26.5 9.3 9.3
Australian Dollar/US Dollar 0.71 -2.7 -6.0 -3.8 -8.1 9.6 -0.4 -9.7 8.3 -1.1 -10.9 -8.3 -14.2 1.8 1.8
New Zealand Dollar/US Dollar 0.66 -3.7 -8.3 -5.7 -8.5 6.6 0.3 -5.3 2.4 1.5 -12.4 -5.1 -0.9 6.6 6.6
Source: Bloomberg, all figures subject to rounding.
An investment cannot be made into an index directly. The performance data shown
relates to a past period. Past performance does not predict future returns.
09 Monthly Market Roundup February 2022Global equity and commodity index performance – figures to 31 January 2022 (%)
1 month 3 months 6 months YTD 2021 2020 2019 2018 2017 2016 2015 2014 2013
Global US & Canada
MSCI World (US$) -5.3 -3.3 0.5 15.9 16.5 28.4 -8.2 23.1 8.2 -0.3 5.6 27.4 16.6
MSCI World Value (US$) -1.2 1.4 4.7 21.3 -0.3 22.8 -10.1 18.0 13.3 -4.0 4.5 27.6 16.5
MSCI World Growth (US$) -9.3 -8.1 -3.9 10.1 34.2 34.2 -6.4 28.5 3.2 3.5 6.6 27.2 16.6
MSCI World Small Cap (US$) -7.5 -8.7 -6.0 7.4 16.5 26.8 -13.5 23.2 13.2 0.8 2.3 32.9 18.1
MSCI Emerging Markets (US$) -1.9 -4.1 -4.5 -4.2 18.8 18.8 -14.3 37.8 11.8 -14.6 -2.0 -2.3 18.6
FTSE World (US$) -5.0 -3.1 0.1 14.9 16.4 27.8 -8.7 24.1 8.7 -1.4 4.8 24.7 17.2
Dow Jones Industrials -3.2 -1.5 1.5 17.0 9.7 25.3 -3.5 28.1 16.4 0.2 10.0 29.7 10.2
S&P 500 -5.2 -1.6 3.4 22.0 18.4 31.5 -4.4 21.8 12.0 1.4 13.7 32.4 16.0
NASDAQ -9.0 -8.0 -2.6 11.3 45.1 36.7 -2.8 29.7 9.0 7.1 14.8 40.2 17.7
Russell 2000 -9.6 -11.5 -8.4 3.7 19.9 25.5 -11.0 14.6 21.3 -4.4 4.9 38.8 16.4
S&P/ TSX Composite -0.4 1.0 5.4 24.7 5.6 22.9 -8.9 9.1 21.1 -8.3 10.5 13.0 7.2
Europe & Africa
FTSE World Europe ex-UK € -4.7 -2.3 0.8 19.2 2.9 27.6 -10.5 12.9 3.2 10.7 7.2 21.8 21.0
MSCI Europe -3.2 -0.3 3.2 21.8 -2.8 26.8 -10.1 10.8 3.2 8.8 7.5 20.5 17.9
CAC 40 -2.0 2.7 6.4 29.2 -5.0 30.5 -8.1 12.5 8.8 11.9 2.5 22.2 20.4
DAX -2.6 -1.4 -0.5 12.8 3.5 25.5 -18.3 12.5 6.9 9.6 2.7 25.5 29.1
Ibex 35 -0.8 -4.2 0.4 9.7 -12.7 16.5 -11.5 11.3 2.5 -3.7 8.5 27.6 2.2
FTSEMIB -1.6 0.7 7.3 24.8 -3.3 33.8 -13.6 16.9 -6.5 15.8 3.0 20.4 12.2
Swiss Market Index (capital returns) -5.0 1.0 0.9 14.2 0.8 26.0 -10.2 14.1 -6.8 -1.8 9.5 20.2 14.9
Amsterdam Exchanges -5.4 -6.6 1.1 23.5 5.5 28.5 -7.4 16.5 13.6 7.3 8.7 20.7 14.0
HSBC European Smaller Cos -8.4 -9.4 -9.7 3.2 15.3 23.7 -20.2 31.0 -2.5 7.0 -9.6 34.9 22.2
MSCI Russia (US$) -8.6 -20.3 -8.4 9.6 -11.6 52.7 0.5 6.1 55.9 5.0 -46.0 1.3 14.3
MSCI EM Europe, Middle East and
Africa (US$) 1.4 -4.8 5.3 25.9 -7.3 19.9 -7.4 16.5 22.8 -14.5 -28.2 -3.9 25.1
FTSE/JSE Africa All-Share (SA) 0.9 10.4 10.6 30.4 7.1 12.1 -8.4 21.0 2.8 5.3 10.9 21.5 26.7
UK
FTSE All-Share -0.3 2.0 5.6 17.9 -9.7 19.1 -9.5 13.1 16.8 0.9 1.2 20.8 12.3
FTSE 100 1.1 3.6 7.9 19.7 -11.4 17.2 -8.8 12.0 19.2 -1.4 0.7 18.7 10.0
FTSE 250 -6.5 -4.7 -3.6 9.3 -4.6 28.9 -13.3 17.8 6.7 11.2 3.7 32.3 26.1
FTSE Small Cap ex Investment Trusts -3.3 -2.7 -2.5 26.9 1.7 17.7 -13.8 15.6 12.5 13.0 -2.7 43.9 36.3
FTSE TechMARK 100 -7.3 -7.9 -6.9 5.3 7.3 39.2 -4.9 9.8 10.0 16.6 12.3 31.7 23.0
Asia Pacific & Japan
Hong Kong Hang Seng 1.7 -6.1 -7.6 -10.3 -0.2 13.0 -10.6 41.3 4.3 -3.9 5.3 6.6 27.4
China SE Shanghai Composite
(capital returns) -7.6 -5.2 -0.8 -1.1 16.5 25.3 -22.7 8.8 -10.5 11.2 58.0 -3.9 5.8
Singapore Times 4.0 2.2 4.4 18.1 -8.1 9.4 -6.5 22.0 3.8 -11.3 9.6 2.9 23.3
Taiwan Weighted (capital returns) -3.0 4.2 3.8 23.1 27.0 28.8 -5.0 19.4 15.5 -6.9 11.2 15.0 12.9
Korean Composite (capital returns) -10.6 -9.9 -16.3 -6.4 33.8 10.0 -15.4 23.9 5.2 4.1 -3.5 2.0 10.7
Jakarta Composite (capital returns) 0.8 0.6 9.2 10.9 -5.1 1.7 -2.5 20.0 15.3 -12.1 22.3 -1.0 12.9
Philippines Composite (capital returns) 3.4 4.4 17.4 3.1 -8.6 4.7 -12.8 25.1 -1.6 -3.9 22.8 1.3 33.0
Thai Stock Exchange -0.5 1.7 9.5 17.1 -5.3 4.3 -8.1 17.3 23.9 -11.2 19.1 -3.8 40.4
Mumbai Sensex 30 -0.4 -2.1 10.6 22.8 17.2 15.7 7.2 29.6 3.5 -3.7 32.0 10.7 28.0
Hang Seng China Enterprises index 1.4 -6.8 -9.0 -20.2 0.0 14.5 -10.0 29.6 1.4 -16.9 15.5 -1.4 19.7
ASX 200 -6.4 -4.3 -3.8 9.7 2.3 25.0 -1.5 13.4 13.4 4.2 7.1 22.0 22.2
Topix -4.8 -5.1 0.7 7.3 7.4 18.1 -16.0 22.2 0.3 12.1 10.3 54.4 20.9
Nikkei 225 (capital returns) -6.2 -6.5 -1.0 -1.6 16.0 18.2 -12.1 19.1 0.4 9.1 7.1 56.7 22.9
MSCI Asia Pac ex Japan (US$) -4.0 -6.3 -6.4 -6.5 23.1 19.8 -13.5 37.8 7.4 -8.8 3.5 4.1 23.2
Latin America
MSCI EM Latin America (US$) 7.4 10.6 -5.2 -0.8 -13.6 17.8 -6.2 24.2 31.4 -30.9 -12.1 -13.2 8.8
MSCI Mexico (US$) -5.2 1.0 -0.1 16.4 -1.7 11.6 -15.4 16.2 -9.1 -14.4 -9.3 0.1 29.1
MSCI Brazil (US$) 13.0 16.5 -9.9 -6.3 -18.9 26.7 -0.1 24.5 66.7 -41.2 -13.8 -15.8 0.2
MSCI Argentina (US$) 5.2 -5.4 20.2 27.2 12.3 -20.7 -50.8 73.6 5.1 -0.4 19.2 66.0 -37.1
MSCI Chile (US$) 12.6 9.3 0.6 -4.0 -4.2 -16.2 -18.9 43.6 16.8 -16.8 -12.2 -21.4 8.3
Commodities
Oil - Brent Crude Spot (US$/BBL) 17.4 8.4 20.6 77.7 -23.0 24.9 -20.4 20.6 55.0 -35.9 -49.7 -1.0 4.1
Oil - West Texas Intermediate (US$/BBL) 14.5 5.5 19.2 81.7 -20.5 34.5 -24.8 12.5 45.0 -30.5 -45.9 7.2 -7.1
Reuters CRB index 9.8 7.4 17.0 52.1 -9.3 11.8 -10.7 1.7 9.7 -23.4 -17.9 -5.0 -3.3
Gold Bullion LBM (US$/Troy Ounce) -0.6 1.5 -1.7 -4.9 23.9 19.1 -1.3 11.9 9.1 -11.4 -0.2 -27.8 5.7
Baltic Dry index -36.0 -59.7 -56.9 3.8 25.3 -14.2 -7.0 42.1 101.0 -38.9 -65.7 225.8 -59.8
Source: Blomberg, total returns in local currency unless otherwise stated.
An investment cannot be made into an index directly. The performance data shown
relates to a past period. Past performance does not predict future returns.
10 Monthly Market Roundup February 2022Footnotes 1 Composite PMI is an indicator of economic health for the manufacturing and service sectors. A reading above 50 indicates an overall increase compared to the previous month, and below 50 a contraction. Manufacturing PMI focuses on that sector alone. 2 Cyclical stocks follow the trends in the economy. They tend to be in demand when the economy is doing well. They include restaurants, hotel chains, airlines etc. 3 A yield or bond spread is the difference in the yield on two different bonds or two classes of bonds. A widening spread means the yield difference between two bonds is increasing, and one sector is performing better than the other. Risk warnings The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Important information This marketing communication is exclusively for use by Professional Clients and Financial Advisers in Continental Europe as defined below, Qualified Clients/Sophisticated Investors in Israel and Professional Clients in Cyprus, Dubai, Ireland, Isle of Man, Jersey, Guernsey, Malta and the UK. It is not intended for and should not be distributed to, or relied upon, by the public. By accepting this material, you consent to communicate with us in English, unless you inform us otherwise. This is marketing material and not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals, they are subject to change without notice and are not to be construed as investment advice. For the distribution of this communication, Continental Europe is defined as Austria, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Italy, Kosovo, Liechtenstein, Luxembourg, The Netherlands, North Macedonia, Norway, Portugal, Romania, Spain, Sweden and Switzerland. Issued by Invesco Management S.A., President Building, 37A Avenue JF Kennedy, L-1855 Luxembourg, regulated by the Commission de Surveillance du Secteur Financier, Luxembourg; Invesco Asset Management, (Schweiz) AG, Talacker 34, 8001 Zurich, Switzerland; Invesco Asset Management Limited, Perpetual Park, Perpetual Park Drive, Henley-on-Thames, Oxfordshire RG9 1HH, UK. Authorised and regulated by the Financial Conduct Authority; Invesco Asset Management Deutschland GmbH, An der Welle 5, 60322 Frankfurt am Main, Germany. Israel: This communication may not be reproduced or used for any other purpose, nor be furnished to any other person other than those to whom copies have been sent. Nothing in this communication should be considered investment advice or investment marketing as defined in the Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, 1995 (“the Investment Advice Law”). Investors are encouraged to seek competent investment advice from a locally licensed investment advisor prior to making any investment. Neither Invesco Ltd. Nor its subsidiaries are licensed under the Investment Advice Law, nor does it carry the insurance as required of a licensee thereunder. EMEA 2024030 / 2022
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