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Q3 2015: Weakest quarter for risk assets in recent years – Deutsche Bank

FXStreet (Delhi) - Michael Lermer, Research Analyst at Deutsche Bank, notes that the Q3 2015 proved to be the weakest quarter for risk assets for some years and most market participants are probably glad to see the back of it.

Key Quotes

“Indeed Q3 saw the poorest quarterly performance for the S&P 500 (-6.4%) and the Stoxx600 (-8.4%) since Q3 2011. It was also the worst quarter for the Nikkei (-14%) since 2010 whereas in EM the Shanghai Composite (-28%) and Bovespa (-15%) posted their worst quarterly scorecard since 2008.”

“In many ways September picked up many of the unresolved issues that we left behind in August. The sell-off in commodities and EM gained further momentum as recessionary fears deepened. That was enough to raise further questions around sustainability of global growth and DM valuations were certainly tested at various points.”

“Macro themes aside, micro stories added their fair share of uneasiness for investors. The sharp sell-off in VW and Glencore were just two of those that amplified the weaknesses into the quarter end. Putting all those aside, the center stage event for September was clearly the seminal FOMC decision, in which the Fed decided against a hike even though it had been flagging it repeatedly earlier in the summer. This lower central bank confidence in the outlook has perhaps added further uncertainty to global markets.”

“The Shanghai Composite dropped for its fourth consecutive month to bring its YTD losses to just under 5% even though following the devaluation scare in August, the past month was a relatively stable one for the Renminbi.”

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