Mawer Investment Management - Market Overview - Q3 2015
by Mawer Investment Management
From our latest Investment NewsletterâŚ
Volatility increased across asset classes in the third quarter of 2015. Chinaâs economy, weak global commodity prices, and anxiety around if, and when, the Federal Reserve will raise interest rates weighed on investorsâ minds. This anxious sentiment was matched by weak, global investment returns across equity markets.
Fears around Chinaâs economic health grew. In August, China devalued its currency peg against the U.S. Dollar by approximately 4%, triggering a wave of concerns surrounding Chinaâs economic growth and stoking fears of a currency war. Chinese equity markets dropped further while capital outflows intensified, forcing the Chinese to sell foreign exchange reserves to preserve the yuanâs lower peg against the U.S. Dollar. In August, for example, China sold just under $100 billion of its nearly $4 trillion in foreign exchange reserves due to this pressure. Some worried that this would have a negative impact on the U.S. Dollar and U.S. Treasury prices.
Read our full account of the quarter here.
Mawer Investment Management Ltd.
