July’s elevated demand in corporate credit and sovereign bonds moderated through August, leading to sharp declines. With fewer new issuances and reduced volatility in spreads and rates,

EMEA witnessed the sharpest declines (-12% equities, -25% FI) reflecting both seasonality and reduced macro volatility after the July EC and Fed meetings. With reduced demand for European sovereign and credit issuances as rates stabilized and spreads compressed, the incentive to borrow bonds fell sharply.

Reduced volatility in China and Japan as indices hit highs, lead to a calmer market for securities lending in APAC as regional equity volumes were down -11%, and fixed income down -16%. A U.S. tariff truce with China and greater certainty related to auto tariffs with Japan were influential as institutional investors buoyed the Chinese market to 10-year highs.

September’s outlook hinges primarily on U.S. Fed policy. That said, global trade tensions, political uncertainty (France in particular), and inflation will continue to be in focus.