Introduction

June 2024 delivered another strong month for global markets, led by a decisive pivot from central banks and a continued decline in inflation across key economies. Investor sentiment improved as the European Central Bank delivered its first rate cut of the cycle and the U.S. Federal Reserve reaffirmed its data-dependent easing path. Equity indices in major markets reached new highs, bond yields declined modestly, and emerging market assets benefited from improved risk appetite.

United States

U.S. equities rallied in June. The S&P 500 gained 3.8% and the Nasdaq Composite rose 4.5%, fueled by strength in technology, AI-linked companies, and resilient corporate earnings. The Federal Reserve left rates unchanged at 5.25%–5.50% but signalled that one rate cut remained likely before year-end, down from the previous projection of three. Markets took the revised outlook in stride, supported by moderating inflation and strong labor market data.

The May CPI, released mid-June, showed headline inflation easing to 3.1% and core inflation dropping to 3.3%. The 10-year Treasury yield declined modestly to 4.32%, while the yield curve remained slightly inverted. Investor focus turned toward second-quarter earnings and the timing of the Fed's first cut - now widely expected in September.

Europe

European markets extended gains following a historic policy shift. The European Central Bank cut its benchmark interest rate by 25 basis points to 3.75%, citing declining inflation and softening economic activity. Eurozone CPI fell to 2.2% in June, while core inflation printed at 2.7%.

The Euro Stoxx 50 rose 2.5%, while bond markets rallied across the region. German bund yields fell in tandem with U.S. Treasuries, and the euro weakened slightly. Despite ongoing political tensions in France and low growth in Germany, broader sentiment remained upbeat thanks to easing financial conditions and improved credit availability.

Asia-Pacific

Asia-Pacific markets were mixed. Japan's Nikkei 225 edged up 1.9% as investors digested the Bank of Japan's pledge to gradually reduce asset purchases while maintaining low interest rates. Inflation in Japan stayed above 2%, but policymakers reaffirmed a cautious approach to tightening, supporting equities.

China's markets saw further recovery. The Hang Seng Index gained 5.4% and the Shanghai Composite rose 2.8%, as industrial activity rebounded and local governments increased infrastructure spending. The People's Bank of China left benchmark lending rates unchanged but boosted liquidity through open market operations. Australia's ASX 200 rose 2.2% as inflation moderated and expectations for an RBA rate cut grew stronger.

Emerging Markets

Emerging markets delivered solid returns in June. The MSCI Emerging Markets Index rose 3.5%, supported by a weaker dollar, lower global bond yields, and inflows into EM debt and equities. Strong commodity prices and improving trade dynamics further bolstered performance.

India's Nifty 50 reached a new all-time high, rising 4.1%, following a stable post-election outcome and sustained domestic demand. Brazil's Bovespa gained 2.7% as the central bank paused rate cuts but maintained an easing bias. Mexico, Indonesia, and South Africa all saw gains on renewed investor inflows.

Commodities

Oil prices rose modestly in June. Brent crude ended the month near USD 86/barrel on the back of stronger global demand forecasts, OPEC+ supply discipline, and lower U.S. inventories. Market participants monitored hurricane season risks and geopolitical tensions in the Gulf.

Gold traded in a tight range, closing the month at USD 2,385/oz, supported by falling yields and steady central bank purchases. Copper continued to rally, rising 5.9% amid tightening global supply, especially in Latin America, and stronger-than-expected industrial demand from China and India.

Fixed Income & Currencies

Global bond markets rallied as inflation data reinforced the case for easing. The U.S. 10-year Treasury yield declined modestly, and European yields followed suit. Credit spreads narrowed across investment-grade and high-yield markets, reflecting improved risk sentiment.

The U.S. dollar weakened slightly against major peers. The euro softened after the ECB cut rates, while the yen stabilised. The Singapore dollar appreciated modestly on strong trade data and MAS policy continuity. Emerging market currencies gained ground as capital flows improved and inflation declined globally.

Outlook

June confirmed that the global monetary policy pivot is underway. While central banks are proceeding cautiously, the direction is clear, and investors are increasingly confident in the disinflation narrative. Markets enter the second half of 2024 supported by strong year-to-date returns, a resilient earnings outlook, and easing financial conditions.

Brightness Capital & Asset Advisory remains constructive across equities, credit, and select commodities. We continue to monitor policy developments, inflation surprises, and sector rotation dynamics, while maintaining diversification and risk awareness in the face of persistent geopolitical and macroeconomic uncertainties.