Introduction

Global equity markets fell over September as expectations of interest rates being higher for longer weighed on investor confidence. In response, investors exited risk assets. The Bank of Canada (“BoC”), U.S. Federal Reserve Board (“Fed”) and Bank of England (“BoE”) all decided to pause at their September meetings. The Fed, most notably, signalled the possibility of one more rate increase this year with inflation still above target. High inflation persisted in September, weighing on households and businesses. Global manufacturing activity contracted, suggesting demand remains relatively muted for manufactured goods.

In Canada, the S&P/TSX Composite Index dropped. The Communication Services sector posted the biggest loss. U.S. equities, as measured by the MSCI USA Index, also declined. Yields on 10-year government bonds in Canada and the U.S. advanced over the month. Gold prices moved lower, while the price of oil increased.

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