Week in review

Week ahead

• 23/07 – U.S. – Existing Home Sales
• 24/07 – U.S. – New Home Sales
• 25/07 – U.S. – Durable Orders
• 26/07 – U.S. – GDP 

Thought of the week

Downside risks to growth arising from ongoing trade tensions continue to hamper export oriented Asian economies. Singapore’s 2Q19 Gross Domestic Product fell 3.4% quarter-on-quarter while Korean exports, a proxy for the region’s trade conditions, fell by a substantial 13.5% year-over-year in June. As a result, central banks have begun to provide support for their economies. Last week, the Bank of Korea and Bank Indonesia cut their respective benchmark interest rates by 0.25% while other central banks in the region such as Australia and India have engaged in similar practices over the past few months. The softening stance adopted by Asian central banks mirrors the prospects of monetary easing in major developed economies and reflective of concerns of a weaker global outlook. Investors seeking to build resilience in their portfolios can consider increasing allocation to fixed income or dividend yielding stocks in defensive sectors.

Chart of the week

Asia central banks ease monetary policy

Percent

Source: Bangko Sentral ng Pilipinas, Bank Indonesia, Bank Negara Malaysia, Bank of Korea, Bank of Thailand, Reserve Bank of Australia, FactSet, J.P. Morgan Asset Management.
Data most recently available as of 19/07/2019.

All returns in local currency unless stated otherwise.
Currencies’ return are based on foreign currencies per U.S. dollar. An appreciation of the foreign currency against the U.S. dollar would be positive and a depreciation of the foreign currency against the U.S. dollar would be negative.