Key Highlights for May 2025
- Global equities rallied as trade negotiations between the United States and China progressed. The tentative deal temporarily lowered triple-digit tariff rates and reversed non-tariff trade barriers, relieving pressure on the global trade landscape. US equities, led by growth and tech stocks, were the primary beneficiary, outpacing global peers for the first time this year. Global ex US equities retained their commanding outperformance over US counterparts in the year-to-date period.
- US Treasury yields pushed higher owing to investor concerns over fiscal sustainability. Unease over bond markets spread globally, particularly in Japan, where long-term yields rose to all-time highs. Within fixed income, high-yield bonds outperformed as credit spreads narrowed.
- Currency markets were quiescent relative to recent months, and the US dollar remained steeply weaker year-to-date.
- Real assets broadly advanced, highlighted by gains in energy and industrial metals futures, which benefited from an improved growth outlook and trade prospects.