Key Highlights for January 2025
- Global equities advanced in January as cooling inflation and US tariff delays catalyzed a risk rally in the second half of the month. European stocks outperformed as the region was spared from US tariffs for now. US equities and growth stocks underperformed as increased competition in the AI space weighed on the information technology sector.
- Trade developments shortly after month end resulted in the US imposing new tariffs on China in February, and on Canada and Mexico in March. All three have planned retaliatory measures. Volatility increased across markets in early February, given the potential for adverse economic impacts.
- Bond markets generally advanced in January, recovering after an initial drawdown stoked by strong US economic data. Volatility was most acute for UK gilts amid mounting fiscal concerns.
- The US dollar was flat, while the yen appreciated as the Bank of Japan hiked interest rates. UK sterling and the Canadian dollar broadly depreciated, with trade news impacting the latter.