Weekly Market Recap
Week in review
- Australia private new capex for 1Q fell 1.6% q/q
- German business and consumer confidence improve
- U.S. consumer confidence for May rises
- RBA official cash rate
- Australia 1Q20 real GDP
- U.S. labour market report
Thought of the week
The Aussie dollar fell by 18% versus the greenback from the start of this year to the March low. Since then it has recouped a large portion of that depreciation. The short term drivers have been the resilience in demand for iron ore, a relatively lite-QE programme by the Reserve Bank of Australia compared to other central banks and better containment of the COVID-19 virus. Improving market sentiment towards economic recovery means a shift away from safe havens like the USD. However, when it comes to the currency, it is better to focus on the importance of our trading partners and performance against a basket of currencies (AUD REER) which has a high weight to the Chinese Yuan. Too much strength may act as a headwind to fragile re-emergence of economic activity.
Can the AUD keep this up?
REER is real effective exchange rate
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.