In November, markets were largely driven by a political and economic newsflow that was slightly more favourable than in the previous months. On the political front, two major risks seemed to ease: that of a Hard Brexit and that of a further escalation in the US-China trade conflict.

In recent weeks equities rallied along with bond yields as investors reacted to the prospect of a US-China ‘phase one deal’ and fading global recession fears. The value of negative-yielding bonds continued to fall, from US$17 trillion over the summer to the current US$12.5 trillion. While equities were previously overshadowed by the excessive gloominess on the global economy and earnings, markets rebounded after corporate results in the US and Europe met or exceeded low expectations, and as economic data did not show any material worsening. The mantra now seems to be ‘not so bad is the new good’

After enjoying stellar performance this year, moving into 2020, investors will increasingly ask whether the global economy will proceed towards a trade war-engineered recession or whether growth will stabilise at a low level and potentially rebound,