Investor sentiment improved in December on rising expectations that major central banks, including the U.S. Federal Reserve Board (“Fed”), may begin cutting interest rates in 2024. In response, global equity markets moved higher over the month. The Fed, Bank of Canada (“BoC”), European Central Bank (“ECB”) and Bank of England (“BoE”) all held their policy rates steady at their December meetings. Inflation continued to subside, helping to open the door to interest rate cuts. Global economic activity remained relatively muted, with tight financial conditions weighing on households and businesses.

In Canada, the S&P/TSX Composite Index advanced, led by the Health Care and Real Estate sectors. U.S. equities, as measured by the MSCI USA Index, also rose. Yields on 10-year government bonds in Canada and the U.S. fell. Gold prices inched higher, while the price of oil finished lower.

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