How did the financial markets perform?

As a result of rising interest rates, both European and US equity markets fell. However, US equity performed weaker compared with European equity. In euros, the damage was relatively limited due to the appreciation of the dollar against the euro. Corporate bonds were also negatively affected by rising interest rates, but to a lesser extent than government bonds. European investment grade corporate bonds reported negative returns, while high-yield corporate bonds were the only asset class to post modest positive returns in September. Asian equities and emerging markets were less affected by rising interest rates. Consequently, price declines here were limited compared with developed markets.