Weekly Market Recap
Week in review
- RBA cuts rates to 0.25%, starts bond purchases
- BoE cuts rates 10bps, another GBP 200bn in QE
- ECB extends QE by EUR750bn
- Global PMI for manufacturing
- U.S. consumer confidence
- BoE policy meeting
Thought of the week
A bridge over troubled waters. The RBA embraced the unconventional last week announcing a multipronged package of rate cuts, low cost term funding for lenders and bond purchases to lower the cost of credit in the economy and address dislocations in the bond market as bond yields spiked due to liquidity concerns. There may have been some disappointment that there was no big bang number on bond purchases as was announced by the ECB or the BoE last week. However, the RBA’s resolve to ensure the smooth functioning of bond markets and buy an unlimited amount of bonds to achieve its target should not be underestimated. The cash rate is as low as it is going to go and will be there for some time, perhaps years.
Bonds' bad behaviour
Yield on Australian government bonds
JPMorgan Global Research Enhanced Index Equity Fund
To achieve a long-term return in excess of the benchmark by investing primarily in a portfolio of companies, globally; the risk characteristics of the portfolio of securities held by the Sub-Fund will resemble the risk characteristics of the portfolio of securities held in the benchmark.