Global equity markets surged higher over November amid rising expectations that global central banks may be nearing the end of their monetary policy tightening. Bets started to be placed about when major central banks may begin dropping interest rates. The U.S. Federal Reserve Board (“Fed”) and Bank of England held steady at their November meetings.

Despite the optimism towards risk assets, economic conditions remained relatively muted. Global business activity, as measured by manufacturing and services sector activity, was weak as a result of waning global demand amid tight financial conditions. In North America, inflation moderated, while labour markets showed further signs of losing momentum. Canada’s economy shrank at an annualized pace of 1.1% in the third quarter. In its second estimate, the U.S. economy grew by 5.2%, annualized, in the third quarter.

In Canada, the S&P/TSX Composite Index advanced, led by the Information Technology and Financials sectors. U.S. equities delivered a robust return over the month. Yields on 10-year government bonds in Canada and the U.S. fell on expectations that policy interest rates may have peaked. Gold prices edged higher, while the price of oil fell over the month.

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