This Market Bulletin has been produced in association with BNY Mellon.

Its intended to provide you with a look back at the events that have affected
the performance of global equity markets in the last fortnight. This is a general market update and should not be considered a comprehensive or
suffcient basis for making decisions.
Political risk was at the front and centre of investors minds
throughout July and August as multiple events shook confdence
people may have had amid improving economic fundamentals in
developed markets.
In Ukraine, tensions increased signifcantly when Malaysian Airlines Flight
MH17 was reportedly shot down over rebel-held territory, killing almost
300 civilians on board. Western countries jointly accused Russian-backed
rebels of involvement. As a result, European Union countries raised
sanctions on Russia to a similar level as the US had already imposed.
Fighting continues in eastern Ukraine, with Russias government becoming
increasingly isolated among the international community.
Meanwhile, fghting broke out between Israel and the Hamas group
in Palestine. Israels reaction to Hamas rockets being fred into Israeli
territory was to put its military forces into combat mode, striking targets
in Gaza from the air and launching a ground offensive. Many in the
international community have condemned the death-toll of more than
1900 civilians during the confict. At the time of writing, a fragile cease-
fre was being negotiated by international brokers.
Argentina defaulted on its debt for the second time in 13 years. Holdout
creditors from a previous debt which the country calls vulture funds
failed to negotiate terms with the Argentinian government in talks in New
York. All of this geopolitical uncertainty hasnt rocked markets as much
as may have been suspected, but it does serve as a reminder that the
world is not immune to new confict and infammation of old grievances
between countries.
Despite tensions, some countries are showing improving economic
outlooks. In the US and UK, further strength in underlying economic trends
suggest that rate rises may occur sooner than expected, while other major
central banks, most notably those in Europe and Japan, are likely to retain
their accommodative stance for the immediate future. Both the US and
UK continue to post positive economic numbers, which has served to give
markets confdence in continued recovery.
Analysts expect the Bank of England may raise rates from historically
low levels before the end of this year, possibly followed by the US
Federal Reserve during the summer months of next year. Europe has
just embarked on a further round of easing with the potential for further
developments. The recent monetary easing by the ECB and lower
sovereign borrowing costs in peripheral Europe have lessened systemic
risk in the euro area and raised growth prospects for later this year.
In Asia, there was stable macro-economic data from China and positive
election results in India, which propelled a rally in that market. The
Association of Southeast Asian Nations countries reversed their frst-
quarter strength, however, while Taiwan outperformed. Although the
path for the coming months is generally positive, the risk of a swing in
sentiment in the region is high, given geopolitical tensions, uncertainties
over Thailands junta and political events in July, including Indonesias
presidential election, Indias budget announcement and Chinas State
Council meeting.
With positive macro news, investors will hope tensions in Ukraine and the
Middle East do not increase in the near-term, while some analysts are
now also watching the various upcoming elections, including the Scottish
independence referendum in September and Brazils presidential elections
in October. On the horizon, there is also the Hong ShanghaiHong Kong
Stock Connect scheme, scheduled to launch in the fourth quarter.
Weekly Statistics (source: FT)
Key performance indicators (as at Friday 8 August 16:35 GMT) Day-by-day analysis of FTSE 100 Index
CURRENT
VALUE
10 DAY
% CHANGE
FTSE 100 6,570 -3.29%
Dow Jones 16,438 -3.07%
Nikkei 225 14,778 -4.44%
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