Guide to the Markets - J.P. Morgan Asset Management

Guide to the Markets

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Key takeaways:

With Brexit talks approaching the 11th hour, the market’s fear of a no–deal scenario still cannot be discounted, which will keep many investors quite rightly on the sidelines or cautious on UK risk. What we do know is with the bank rate at 75bps, the Monetary Policy Committee had three cuts-worth of ammunition in a no-deal scenario (if it does actually cut at all). On a softer Brexit outcome, we believe the market will price a far steeper yield curve with a faster tightening cycle forecast.

Given the current uncertainty over the outlook for interest rates, Guide to the Markets presents a wide range of macroeconomic data that can help liquidity investors assess the economic backdrop and position their portfolios. The Guide covers all the major issues, including:

  • Lead indicators - Considering risks of a global slowdown fuelled by a trade war have increased, investment intentions, and consumer and business confidence data, will need to be closely monitored.
  • Inflation - Average weekly earnings growth rose to 3.3% in October, which is the highest level since July 2008 (p.32). With unemployment remaining close to multi-year lows at 4.1%, and a reduction in net inward migration, there appears to be little slack left in the economy. This metric will certainly be closely followed by the Monetary Policy Committee.

As you consider these important topics, we will be happy to share our market views and tailor liquidity solutions to best meet your needs.