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Market developments were interesting, though. The yield on the 10-year US government benchmark bond almost reached 5%, while the advance third quarter US GDP estimate came in at an annual rate of 4.9%. And the oil price, perhaps somewhat surprisingly, with a bloody war raging in the Middle East, ended the month lower.

In the financial world, the subject du jour this month was centralbankology. Ok, so we had to get used to the idea of interest rates staying higher for longer – but how much higher (if at all) and how much longer?

In the US, at least, long rates ended the month substantially higher. Expectations of future inflation rose, and corporate spreads increased, as they did in Europe. Global bonds, as measured by the Bloomberg Global Aggregate Index, fell by 1.2%, bringing this year’s loss up to 3.4%.

Stock markets fell across the board, with the minor exception of Denmark. The S&P 500 was down 2.1%. In case you wonder how this was related to the course of interest rates, you may find it interesting to note that the correlation between the S&P 500 and the preceding day’s closing US 10-year rate this month was a striking -0.61. Don’t read too much into it but feel free to draw some conclusions.

And the tragic events in the Middle East? Well, the first few days after the October 7 attacks, global stock markets actually rose, reaching their intra-month highs on October 11. Oh, incidentally, that’s when long rates reached their intra-month lows in both Europe and the US.

But that’s probably not something we’re going to remember.

 Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on, market developments, the portfolio manager’s skill, the fund’s risk profile, as well as fees for subscription, management and redemption. Returns may become negative as a result of negative price developments. This is marketing communication.



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