European equity markets carried positive momentum from April into May to begin, but lost ground at the end of the month on the back of political tensions in Italy. Net performance across European equity markets was quite mixed, with the UK benchmark index up by close to 3% and the Eurozone benchmark index down by 2.5%. International equity markets also had varying fortunes in May. Government bond markets rose sharply at the end of May during the period of Italian political tensions. Sterling corporate bonds saw a marginal change during the month. Realised volatilites in all regions continued to decline in May, falling back to below 10% before rising back up slightly due to stock price declines at the end of the month.