Weekly Market Recap
Week in review
- Australian CPI inflation 1Q21 0.6% q/q
- U.S. 1Q21 GDP 6.4% q/q annualised
- China PMI manufacturing falls to 51.1 in April
- RBA interest rate decision
- Australia housing finance
- U.S. nonfarm payrolls
Thought of the week
Australian investors may be feeling deflated after last week’s inflation report. Inflation in the first quarter of the year rose by 1.1% y/y, below consensus expectations and some way from the RBA’s 2-3% target band. However, the full impact of the base effects from a year ago were not fully captured in this report. Government policies around housebuilding and education created a drag on prices, and the stronger currency reduced import inflation. While some of these forces will linger into the second quarter, the base effects of comparing prices to a year ago will be much stronger and inflation can be expected to move sharply higher. The strength will be short-lived and the annual rate of inflation is likely to start to fall again over the rest of the year and remain below the RBA’s target. For a central bank focused on outcomes rather than outlook this is hardly challenging the RBA’s policy stance or a change in messaging at this week’s policy meeting.
Australian CPI and core CPI inflation, year-over-year change
JPMorgan Global Strategic Bond Fund
A wise traveler plans for the unknown. With a focus on mitigating downside risk, JPMorgan Global Strategic Bond Fund strives to deliver attractive risk-adjusted returns in different market conditions by investing flexibly across global fixed income markets.