Investment update - January 2025

In January 2025, the global financial markets experienced positive returns across all major asset classes. The smooth presidential transition in the US and the market's optimistic view of President Trump's pro-growth policies boosted global share prices. The US S&P 500 increased by 2.7%, despite a late-month tech sector sell-off due to the emergence of Deepseek, a low-cost AI platform from China.

In Australia, the ASX increased by 4.6%, reaching a record high by the end of January. This was driven by optimism about a potential rate cut by the Reserve Bank of Australia in February and a better outlook for the Chinese economy. 

Globally, European markets had a strong start to the year, with the German DAX surging by 9.2%, the French CAC increasing by 7.7%, and the UK FTSE increasing by 6.1%. The Japanese Nikkei fell by 0.8% due to a stronger Yen. Bond yields were relatively flat, and gold prices hit a new record high as investors continued to be attracted to its safe-haven characteristics amid the threat of tariffs and global policy uncertainty. The European Central Bank and The Bank of England continued to cut rates in response to slowing inflation and growth, while China's GDP growth was boosted by stimulus measures and strong retail sales and exports, which were 10% higher in the year to end-December.

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