Global share markets brushed off geo-political threats in Syria and North Korea to post reasonable gains and continue their impressive run so far in 2017. European markets were the best performers advancing by 2.4% as markets were relieved with the outcome of the first round of the French Presidential election, which ultimately resulted in the landslide election of pro EU candidate Emmanuel Macron.
Asian markets were higher across the board led by Hong Kong and Korea both up 2.1% while Japan rose 1.5%. The US and Australian markets were more subdued but still nudged 1% higher. Our market’s advance was led by IT, healthcare, utilities and real estate investment trusts while the resource sector was weighted down by a sharply weaker iron ore price, which fell by 23%. In the US, the market is eagerly awaiting the drafting of tax reform legislation, the centerpiece of which is a cut to the corporate tax rate from 35% to 15%, which will boost corporate profits and business investment.
In currency markets, the GBP rallied 3% against the USD following the announcement of the UK election which the Conservative party led by Theresa May is expected to win comfortably giving her leverage to push forward with Brexit negotiations with the EU. The AUD fell 2% against the greenback as commodity prices fell. Bond yields continued their recent positive run with both Australian and US government bond yields falling slightly over the month.