Global Equity Markets Rally 11.53% in Q2 2025: MSCI ACWI Index Advances, Bloomberg Fixed Income Gains Ground.

Global equity markets rallied in Q2 2025, with the MSCI ACWI Index advancing 11.53%. Global fixed income also gained ground, as the Bloomberg Barclays Global Aggregate Bond Index rose 2.78%. The article highlights the strong performance of equity markets during this quarter, while also noting the steady growth of fixed income markets.

Global equity markets rallied in Q2 2025, with the MSCI ACWI Index advancing 11.53%. This robust performance was driven by a combination of strong corporate earnings, positive economic indicators, and supportive monetary policies. The Bloomberg Barclays Global Aggregate Bond Index also gained ground, rising 2.78% during the quarter. This steady growth in fixed income markets was largely attributed to a decrease in US Treasury yields and expectations of Fed rate cuts [1].

In August 2025, bond investors experienced a strong month, with 88% of dollar bonds ending higher. This was particularly evident in the Investment Grade (IG) and High Yield (HY) bond spaces, where 90% and 81% of bonds, respectively, ended in the green. The shift lower in US Treasury yields, coupled with tightening credit spreads, contributed significantly to this performance [1].

The month saw the Treasury yield curve steepen, with the 2Y yield falling by 33 basis points (bp) and the 10Y yield ending 14 bp lower. This bull steepening was accompanied by a series of soft economic data points, including a weaker-than-expected jobs report and a contraction in the ISM Manufacturing PMI. These indicators, along with moderated inflation, led several Federal Open Market Committee (FOMC) members to hint at a potential 25 bp rate cut in the September meeting [1].

In the IG space, ultra long-dated bonds of issuers like Aramco, CK Asset, and PTT Global saw significant gains. Among the HY space, GLP China’s dollar perps rallied the most, by ~24%, after securing a $1.5bn commitment from the Abu Dhabi Investment Authority (ADIA). Other notable gainers included Telesat’s dollar bond due 2026, which rallied by over 20% after reporting strong Q2 earnings [1].

Global corporate dollar bond issuances stood at $211bn in August, just 1% lower month-over-month (MoM). This issuance volume was 4% higher than in August 2024, with IG issuers accounting for 81% of the total. The largest deals globally were led by Eli Lilly’s $6.75bn seven-trancher, Chevron’s $5.5bn seven-trancher, and Argos Holdings’ $5.4bn four-part deal [1].

In the APAC and Middle East region, deal volumes were led by DBS Group’s $2bn issuance and Temasek’s $1.5bn two-part issuance. Other large deals included NAB’s €1.75bn deal, OCBC’s $1bn Tier-2 issuance, CBA’s €1bn, Macquarie’s, and Wynn Resorts’ $1bn issuances each [1].

In conclusion, Q2 2025 was a strong quarter for global equity and fixed income markets. While equity markets benefited from robust corporate earnings and supportive policies, fixed income markets gained traction due to decreasing yields and expectations of rate cuts. The August 2025 bond rally, driven by US Treasury yield drops and credit spread tightening, further underscored the resilience of the fixed income sector.

References:
[1] https://bondblox.com/news/august-2025-88-of-dollar-bonds-rally-as-yields-drop-amid-rate-cut-bets