Share markets put in a solid performance over the month with all major exchanges posting positive returns led by Japan up 5.1% and Korea 4.8% which rose on US China trade optimism, despite little progress in resolving the dispute. The US market improved by 1.7% on the back of a further 25 basis point interest rate cut by the US Federal Reserve and in spite of a swirling political controversy engulfing the Trump administration.
The Australian market nudged 1.5% higher, driven largely by a strong banking sector which rose 5.9%, offset by weakness in defensive sectors such as Telcos, which fell 4.4%. Both Europe and the UK were up 3% despite no clarity on the Brexit process, with the 31 October deadline set by the British PM Boris Johnson fast approaching. With some market participants expecting a larger rate cut by the Fed, US treasury yields rose 18 basis points, which pushed Australian bonds yields 7 basis points higher to finish at 0.96%. The AUD was steady against a USD that was a touch stronger against the other major cross rates. In commodity markets, the major mover was oil, which was up 5.8% following a drone attack by Iranian backed Yemeni rebels, causing supply disruption in Saudi Arabia and increasing political tensions in the Gulf.