Global Equity Markets

United States 

 The U.S. markets moved up initially, as investors embraced the latest corporate earnings reports coupled with encouraging data on the economic front. Markets touched fresh highs as investors picked up shares of large companies on expectations that the Central Bank’s stimulus measures will help drive the rally further. Better-than expected report on homebuilder confidence also supported bourses.

Europe

 European bourses surged initially as Italy's new Prime Minister formed his Cabinet, ending the country’s two-month long political deadlock. The European Central Bank (ECB) lowered rates but markets remained mixed amid apprehensions that it may not be enough to boost the economy. The falling trend reversed after economic fundamentals of the U.S. improved. Contraction across the Euro zone in the first quarter of 2013 increased expectations of further monetary easing by the ECB.

Asia

 Asian markets witnessed a mixed trend during the month. Japanese bourses fell due to a rising yen coupled with weak industrial production and retail sales data. Bourses recovered soon as investors welcomed China's better-than-expected exports growth in April. Investors gained confidence in the Japanese economy after the Bank of Japan raised its assessment of the economy for the fifth consecutive month.

 The 10-year U.S. Treasury bond yields increased 46 bps to close at 2.13% compared to the previous month’s close of 1.67%, after moving in the wide range of 1.62% to 2.17%.

 U.S. bond yields surged during the month and touched 13-month highs on positive economic data. Better-than-expected jobs report, unexpected increase in U.S. retail sales and recovery in U.S. consumer sentiments impacted bond yields during the month of May.

 Yields were impacted further after the dollar rose to a 4-1/2-year high against the yen, breaking through the key 100-yen mark and spurring sales in longer-dated Government debt.

 Towards the end of the month, yields of U.S. Treasuries moved up further after minutes from the Federal Reserve's April 30-May 1 meeting showed that many Central Bank officials want to see more evidence that the economy is recovering before tapering their bond-purchase program.