OREANDA-NEWS. Market players mainly responded to particular events, such as continuation of the yen decline, results of the plenum of Central Committee of China Communist Party, release of macroeconomic data, etc.

A little different was unexpected decrease of the ECB rate, which became a major surprise for most analysts, causing a short-term surge of optimism at stock markets. However, this optimism was not long-lasting. It seems that investors considered this rate decrease to have minimum impact on economy, given other measures taken by leading central banks. Consequently, among the major European indexes only German DAX displayed significant growth over the month, and all other European markets remained at the level present at the end of October.

Markets of emerging countries continued to lag behind. Although Chinese market grew significantly, following the end of the plenum of Central Committee of China Communist Party, after which most radical social and economic reforms over the last thirty years were announced, markets of other major emerging countries were under pressure of sellers. One of the main reasons for this was the decline of national currencies due to expected termination of QE programme in the USA. JPM EM FX index of emerging countries currencies dropped by more than 2% in November, and this influenced overall value of stocks of those countries.

At the beginning of the month, manager of global stock market funds recovered positions in ETFs of developed countries, first of all, the USA, since macroeconomic data and general mood evidenced that this market is not ready for more or less substantial correction. Meanwhile it was decided to slightly decrease the share of emerging countries in the portfolio, given decline of local currencies. Also, profit was taken under some positions that, in our opinion, demonstrated too fast and strong growth, thus making correction more probable in the short term.

In new funds launched in November, mid-term positions are built in the US and European economy sectors that we consider the most promising.

Negative trends returned to bond markets due to resumed yield increase under the US government bonds. Despite expectations, the macroeconomic indicators released in November were very strong, and this makes early termination of the QE programme more probable. Given such expectations, investors are not very willing to buy bonds, especially government ones, since they wait for higher yield levels.

The situation is a little better in corporate sector, since it is less sensitive to dynamics of the US government bonds, and in the sector of bonds denominated in EUR. Unlike the USA, economic situation in Europe is far from being perfect, therefore the ECB policy of low rates and stimulating measures most probably will be continued for long.

Managers of the bond funds continue to keep to moderate strategy under which bonds with low and middle duration and high coupon yield are preferred.