Milliman Market Monitor London - 31 October 2018

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By Neil Dissanayake, Peter Lin | 13 November 2018
European equity market returns suffered the largest monthly decline in 2018, with signs of concern for high equity valuation, continuing trade tensions and tightening of monetary policies. Both the Euro Stoxx 50 and the FTSE All Share indices ended the month down more than 5%. Equity markets around the globe also took heavy tumbles in October, with declines of more than 6%. The US market is alone in keeping its year-to-date return positive at the month end. Global corporate bonds declined by close to 2% in October. For GBP, there were decreases in all but the shortest term on the curve during October. Realised volatility across the globe increased in the month of October on the back of large declines in the equity markets. The US market saw the largest change in volatility. The volatility risk premium also increased in the month.