Weekly Market Recap
Week in review
- Australia retails sales -1.7% m/m in August
- Australia housing finance -4.3% m/m in August
- China PMI for manufacturing declines to 49.6
- RBA interest rate decision
- Eurozone retail sales
- U.S. nonfarm payrolls
Thought of the week
Bonds were in focus last week as a jump in yields created anxiety for investors. The hawkish shift by central banks in recent weeks in addition to surging energy prices lifted bond yields, as investors started to factor in more permanent and higher inflation. Higher inflation could lead to markets starting to price in rate hikes even sooner. Conversely, it could mean a drag on growth as household discretionary spending is squeezed, adding to already lingering growth concerns. However, history shows that supply shocks in energy markets can be extreme but are not usually permanent, and household balance sheets are in fairly robust shape. Furthermore, energy only accounts for between 7-8% of the inflation basket in many developed economies, which is relatively small compared to core goods or shelter costs. Markets may be adjusting to a firmer inflation outlook and higher yields, but those rises are still likely to be modest given the economic backdrop.
Surging energy prices stoking inflation fears
Indexed to 100, 31 December 2019
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.