Weekly Market Recap
RBA says no
Week in review
- RBA keep rates on hold at 0.10%
- U.S. ISM non-manufacturing surges to 63.7
- China PMI for services rises to 54.3
- Australian business and consumer confidence indices
- U.S. CPI inflation
- Australian labour market report
Thought of the week
Speculation that central banks may have to raise interest rates sooner than planned has investors worried, and markets have moved to price in policy tightening in the year ahead (see chart). However, the RBA maintained a consistently dovish message in its policy statement last week. Despite the economy performing better than expected, the RBA must balance this out against the medium term difficulties in generating higher inflation through a tighter job market and stronger wage growth. Not to mention the potential economic soft-patch as the impact of fiscal support starts to fade. The noise around the housing market is just that, noise. Policy is changed according to the underlying pace of inflation in the economy, not because of pockets of inflation, whether they be in house prices or elsewhere. Risks around any financial instability created by residential lending will likely be addressed through new macro-prudential rules being introduced in the months ahead.
Australia implied cash rate
30 day interbank futures implied yield
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.