Weekly Market Recap
Fiscal splurge on the way
Week in review
- Australian retail sales rose 7.1% m/m
- Australian housing finance rose 5.6% m/m
- U.S. CPI inflation rose 1.4% y/y
- Australia consumer inflation expectation
- Australia unemployment rate
- U.S. Markit manufacturing & services PMI
Thought of the week
The minutes from the latest Federal Open Market Committee meeting show that Federal Reserve (Fed) officials voted to continue its USD 120billion per month asset purchase program. However, some officials are now contemplating the need to start reducing monetary stimulus. This naturally has brought on fear of another taper tantrum and pushed the spread between two- and 10-year Treasuries to its highest point in almost three years. In 2013, yields surged following the Fed’s unexpected announcement that it was considering dialling back its asset purchases, which provoked severe market volatility. While some officials have entertained the idea of cutting bond purchases, most have called the debate premature and do not expect any changes before 2022. Rising Treasury yields signal investor confidence in a near-term economic rebound, which will support the case for equities in the medium term. Investors should remain cautious amidst the uncertainty surrounding vaccine deployment and further fiscal aid.
Yield spread between 2- and 10-year Treasuries
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.