Risk assets ended October on the back foot, weighed down by news of renewed nationwide COVID-19 lockdowns across Europe and pre-US election jitters. Equity benchmarks in the developed world fell, led by weakness in Europe and the UK, however, emerging market stocks ended the month higher. US Treasuries and corporate bonds also came under pressure, whilst the Dollar index and Gold were largely unchanged.

The failure of targeted regional measures to curb COVID-19 infection rates led governments across continental Europe and in the UK to reintroduce national lockdowns as October came to a close. Although the stringency of restrictions fell short of those applied earlier in the crisis, they confirmed fears of a difficult winter ahead and the risk of a double-dip recession. Reassuringly, governments in Europe have extended programmes to support household incomes and protect the labour market. In the US, COVID-19 cases also accelerated, but as yet, the stringency of restrictions has not meaningfully increased. However, we could see levels of mobility drop as the public grows more cautious.

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