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

Guide to the Markets

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Key takeaways:

In recent months, global central banks have moved from displaying a “less hawkish” bias to an outright dovish stance. The question for investors as we head into the second half of 2019 is whether any moves to ease monetary policy will provide enough support to delay the next recession.

In the UK, Bank of England forecasts and rhetoric have to be partially discounted at this juncture as its base assumption for Brexit is one of a “smooth transition”. Recent events make it clear the public certainly don’t view this as a base case scenario.

Against this challenging backdrop of Brexit uncertainty and deteriorating global growth, Guide to the Markets presents a wide range of macroeconomic data to help liquidity investors assess the outlook for UK interest rates and position their portfolios. The Guide covers all the major issues for UK investors, including:

  • Lead indicators - With trade wars showing no near-term signs of abating, UK purchasing managers’ indices remained relatively subdued in the second quarter, while manufacturing and export data surprised to the downside. (p. 5, 11, 33)
  • Inflation - Market participants will be closely watching whether the downturn in external demand will spill over to domestic demand, and whether Brexit, coupled with recent geopolitical events, will continue to weigh on business expectations as well as consumer confidence. (p. 32, 33, 34)

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