Weekly Market Recap
Oil market rebalancing
Week in review
- Australian business confidence higher in January
- Australia consumer confidence rises in January
- U.S. CPI inflation rate soften than expected at 1.4% y/y
- U.S. retail sales
- Australian employment report
- Australia preliminary retail sales
Thought of the week
The price of Brent crude rose to its highest level in a year last week, breaking above US$60/bbl. The expected pickup in economic momentum over 2021 is helping to lift the price of oil but the real driver was unexpected production curbs by Saudi Arabia. Saudi Arabia agreed to cut production by an additional one million barrels per day in February and March. Inventory levels in the U.S. are also declining, assisting in rebalancing the oil market (see chart). In the short term the oil market is most relevant for the inflation outlook as the year-on-year comparisons will soon start to impact headline rates of inflation. Longer term the focus of the oil market will be on climate change and emission targets. The U.S. has rejoined the Paris climate accord as a first step towards net-zero carbon emissions by 2050. This will require a massive shift towards electrification through renewable energy as well as significant investment in climate related infrastructure to support it.
U.S. crude oil inventories and rig count
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.