Monthly Market Review – June 2024


June happened to be a volatile month for most of the asset classes including equities, commodities, and fixed income markets amid mixed economic data released by major economies. The European Central Bank took the lead to cut the rates, however, the consensus for interest rates cut to happen in the second half of the year in US is getting traction. Some equity markets gained while others dropped, which reflects highly uncertain economic outlook, however, we observed some softness in yield curve that supported the fixed income markets. The Bank of England announced Financial Stability Report, which highlights that financial assets look overpriced relative to historical standards.

Looking at the performance of major asset classes, global equity markets depicted a mixed behaviour as economic data signalled a softer stance in some economies while remained sticky in others. DJ Islamic market index, the benchmark for shariah-compliant investments, outperformed other global peers with 3.69% upside movement while the US equity market barometer S&P 500 index gained 3.59%, broadly reflecting optimistic view on upcoming rate cuts. The next best performing equity market was the Japan’s Nikkei 225 index that ended the month with 2.85% increase. On the negative side, China’s Shanghai index took the lead and fell 3.87% as government’s stimulus policies seem to have not convinced investors enough to take risk positions. The European stocks broader index, Euronext 100, declined just over 3% amid political uncertainties resulting from elections in France and European Parliament while UK FTSE 100 index lost 1.05% reflecting concerns over financial assets’ overvaluation. Commodity markets also showed mixed performance with DJ Commodity Index decreased by 1.4% and gold remained flat, however, Oil surged nearly 4.4% amid continued tensions in Middle East and general geopolitical atmosphere. Lastly, UK pound depreciated by 0.75% against US dollar while DJ Sukuk Index rose 0.81% amid easing pressure on the yield curve.

Market Snapshot

News & Key Events in June


• The annual inflation rate in the UK slowed to 2% in May 2024, the lowest since July 2021, from 2.3% in April and in line with forecasts.

• The Bank of England decided to maintain the Bank Rate at 5.25% during its June meeting, as expected, with two members advocating for a decrease to 5%.

• The British economy expanded 0.7% on quarter in Q1 2024, slightly higher than initial estimates of 0.6%. It is the strongest expansion in over two years, ending the recession it entered last year.

• The Bank of England announced Financial Stability Report. Risks to the UK financial system are broadly unchanged since Q1. But some asset prices have continued to rise, and the risk of a sharp correction persists.


• The annual inflation rate in the US unexpectedly slowed to 3.3% in May 2024, the lowest in three months, compared to 3.4% in April and forecasts of 3.4%.

• The Federal Reserve left the fed funds target range steady at 5.25%-5.50% for a 7th consecutive meeting in June 2024, in line with forecasts. Policymakers do not expect it will be appropriate to reduce rates until they gained greater confidence that inflation is moving sustainably toward 2%.

• The US economy expanded an annualized 1.4% in Q1 2024, slightly higher than 1.3% in the second estimate, but continuing to point to the lowest growth since the contractions in the first half of 2022.

• The Biden administration passes new federal rules that mandate new vehicles sold in the U.S. have to increase fuel economy in automobiles by 2% per year for 2027 to 2031 for passenger cars and 2029 to 2031 for SUVs and light trucks.


• Annual inflation rate in the Euro Area eased to 2.5% in June 2024 after briefly accelerating to 2.6% in May, and matching market forecasts, preliminary estimates showed.

• The ECB lowered the three key interest rates by 25 basis points in June, in line with expectations, marking a shift from nine months of stable rates after inflation declined by more than 2.5 percentage points since September 2023. The main refinancing operations rate was lowered to 4.25%, the deposit facility rate to 3.75%, and the marginal lending rate to 4.5%.

• The Eurozone economy expanded 0.3% on quarter in the first three months of 2024, recovering from a 0.1% contraction in each of the previous two quarters, the final estimate confirmed. It also marks the strongest GDP growth since the third quarter of 2022, with net trade making the largest upward contribution.

• The National Rally (RN) has won 33% of the popular vote in the first round of France’s snap two-round general election, according to final results, with the leftwing New Popular Front (NFP) alliance on 28% and President Emmanuel Macron’s centrist Together bloc on 21%.


• China’s annual inflation rate was at 0.3% in May 2024, holding steady for the second straight month while falling short of market forecasts of 0.4%. It was the fourth straight month of consumer inflation, signaling an ongoing recovery in domestic demand.

• The People’s Bank of China left key lending rates unchanged at the June fixing, aligning with market expectations. The 1-year loan prime rate (LPR), the benchmark for most corporate and household loans, was maintained at 3.45%. Meanwhile, the 5-year rate, a reference for property mortgages, was retained at 3.95% following a record cut of 25bps in February.

• The Chinese economy grew by a seasonally adjusted 1.6% in Q1 of 2024, quickening from an upwardly revised 1.2% increase in the previous quarter.


• The annual inflation rate in Japan accelerated to 2.8% in May 2024 from 2.5% in April, pointing to the highest reading since February.

• The Bank of Japan unanimously maintained its key short-term interest rate at around 0% to 0.1% at its June meeting, as widely expected, after delivering the first rate hike since 2007 and ending its eight years of negative rates in March.

• The annual inflation rate in Russia jumped to 8.3% in May of 2024 from 7.8% in April, the highest since February 2023, when base effects from Western sanctions softened the soaring levels of price growth in the Russian economy.

• The annual inflation rate in Canada rose to 2.9% in May of 2024 from the three-year low of 2.7% in the earlier month, contrasting with market expectations that expected a slowdown to 2.6%.

• Indian Elections update: Prime Minister Narendra Modi and his Bharatiya Janata Party (BJP) won the most seats for the third consecutive time but have fallen short of a majority in the Lok Sabha, India’s lower house of parliament. Instead, they will need to turn to their allies in the National Democratic Alliance (NDA) to reach the 272 seats required to form the next government.


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