at Taming Inflation

Introduction

Global equity markets rose over October, despite some periods of volatility. Sentiment swayed as economic data had investors considering how aggressive central banks might be at upcoming meetings. Inflation remained elevated in Canada and the U.S. in September even though it eased from August. In Europe and the U.K., inflation ticked higher in September. Meanwhile, a preliminary estimate showed the U.S. economy expanded in the third quarter, reversing two straight quarters of declines, while growth in China expanded faster in the third quarter over the previous quarter. The Bank of Canada (“BoC”) raised its benchmark overnight interest rate by 50 basis points (“bps”) to 3.75%, while the European Central Bank raised its key interest rate by 75 bps to 2.00%.

The S&P/TSX Composite Index advanced, led by the Energy and Information Technology sectors. South of the border, the S&P 500 Index finished higher, benefiting from the strong performance of the Energy sector. Yields on 10-year government bonds in Canada and the U.S. moved higher over most of the month before those gains pared back late, but yields still finished higher. The price of oil advanced over the month, while the price of gold finished slightly lower.

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