In our regular market round-up, we take a look at what's happened in Q3 2020.

Despite a return of volatility in September, equity markets rose and credit spreads fell in Q3 as economic and earnings data outperformed, albeit downbeat, expectations. Government bond yields rose slightly but gold prices once again moved higher over the quarter.

Some of the headlines in Q3 2020 include:

• GDP data will likely reveal record-breaking growth rates for many economies in Q3, following Q2’s record-breaking declines. However, while high frequency data, such as travel and navigation app usage, point to a continued recovery in activity in the major advanced economies, they suggest the pace of improvement slowed markedly towards the end of Q3. Furthermore, consensus forecasts suggest it may be several years before most major advanced economies regain pre-pandemic levels of output.
• Composite Purchasing Managers’ Indices, which combine manufacturing and services, signalled that the recovery in global activity continued in September. Regional indices generally remained at levels consistent with month-on-month expansion, though did point to more moderate expansion in some regions.
• After having risen to 1.0% in July, headline UK CPI inflation fell to 0.2% in August, its lowest level since December 2015.
• The Fed’s shift to “flexible” average inflation targeting likely means interest rate rises are even further away than previously envisaged. The Bank of England continues to send mixed messages on the potential use of negative interest rates, but an operational review is ongoing and market pricing, at least, suggests negative interest rates could be introduced in 2021.

To find out more, download our update of all key market trends and statistics over the quarter. 

ACCESS THE FULL COPY HERE