Equity markets decline.
Australian shares fell 3.8% in October, despite ending the month on the largest one-day gain in two-and-a-half years.
International equity markets declined less sharply, with the MSCI World Ex Australia (AUD Hedged) falling 1.7%. The worst performing sectors globally were Energy and Utilities.
Emerging markets worst performing asset class in October
Emerging markets were the worst performing asset class in October, with the MSCI Emerging Markets Index declining 4.5% in October. Despite this decline Emerging Markets have returned 33.8% for the year to October.
Another tough month for bond markets
In Australia the UBS Composite Bond index returned 0.2% in October, once again under-performing the UBS Bank Bill index.
The Lehman Global Aggregate Index (hedged) returned –0.5% for the month. International bond yields continue to rise as the market prices higher inflation expectations, resulting in higher yields but lower relative capital values of such bonds.
Ben Bernake nominated to replace Alan Greenspan at the Federal Reserve
President George W Bush nominated Ben Bernanke to succeed Chairman Alan Greenspan at the Federal Reserve when his term ends on 31st of January 2006. Bernanke is a former Federal Reserve Governor and current Chairman of Bush’s Council of Economic Advisers.
Equity markets rallied on the announcement, yet bond markets sold off, sending Treasury yields to their highest level since March 2005, on concerns that Bernanke would be more supportive of growth over inflation. 10 Year US Treasuries started the month yielding 4.22% and closed the month at 4.55%.
18th-November-2005 |