In contrast to the cryptocurrency market, for example, there was little action to be had in ‘traditional’ financial markets in May. Yields on both equities and (government and corporate) bonds hovered around 0%. European equities and listed property were positive outliers.

Despite some occasional peaks and troughs, most financial markets hardly moved on balance in May. To illustrate: European government bonds, corporate bonds and high yield bonds yielded 0.0%, -0.1% and +0.2%, respectively. The picture in the equity markets was hardly more exciting, with the MSCI World Developed Markets index delivering a monthly yield of -0.2%.

A rather dull month for financial markets?

While May may thus seem a fairly dull month for financial markets on the face of it, this picture is somewhat deceptive. Beneath the surface, there were some more or less significant developments going on, for example at the regional level in equities. European equities performed remarkably well in May, with the MSCI Europe index yielding +2.6%, thanks in part to macroeconomic windfalls. US equities on the other hand lagged behind, with a -0.7% yield for the MSCI North America index. This was partly due to the drop in value of the US dollar, which lost almost 1.5% against the euro in May, and has even depreciated by some 10% over the past year. Asian and emerging market equities also lagged behind Europe, with May yields of +0.1% for the MSCI Asia Pacific index and +0.9% for the MSCI Emerging Markets index.