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

Guide to the Markets

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The Guide contains analysis of economic and market data through March 31, 2018, which presents a wide range of macroeconomic data which can help liquidity investors assess market risks and position portfolios in the coming quarter. Highlights include:

  • Chinese economic data retained positive momentum during the first quarter, notwithstanding some seasonal volatility in data due to Chinese New year. Exports remained robust, while industrial production, retail sales and fixed asset investments showed broad based growth. Monetary conditions eased slightly, allowing market driven interest rates to decline from their year-end highs. Meanwhile, Chinese yuan was stronger versus the U.S. dollar as foreign exchange reserves continued to recover. Finally, inflation remained muted and the People’s Bank of China (PBoC) kept policy rates unchanged during the quarter. The National People’s Congress has also appointed Yi Gang as the new PBoC governor, replacing Zhou Xiaochuan. The expectation is that Yi will maintain the course of monetary policy.

  • Australian money market rates moved higher during the quarter as a combination of Federal Reserve rate hikes, stronger economic data and expectations of a more hawkish Reserve Bank of Australia weighed on the market. Housing saw further slowdown as macro-prudential rules have curbed lending to investors; this muted consumer confidence [consumer confidence has been on upward trend since late 2017] and retail sales, despite very robust employment data [no real change in wage growth though]. Meanwhile business sentiment was robust, supported by strong exports and a recovery in investment spending. Finally, inflation remained muted during the quarter.

  • Singaporean money market interest rates moved sharply higher during the quarter as a combination of Federal Reserve rate hike expectations and better domestic economic data weighted on the market. Industrial production, Purchasing Managers' Index and exports all remained very robust during the quarter, supported by strong global electronics demand. Domestic demand and services were firm but weak tourist spending took some momentum out of overall retail sales. Inflation remains muted by historical standard.

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