Week in review

• Eurozone industrial production rose 0.8% m/m
• U.S. retail sales m/m growth disappointed at -1.3%
• China industrial output rose 8.8% y/y

Week ahead

• Eurozone Markit PMI composite
• U.S. current account
• Bank of England interest rate announcement

Thought of the week

In last week’s Federal Open Market Committee meeting, the Federal Reserve (Fed) signaled a more hawkish stance in its monetary policy outlook, driven by the committee’s more optimistic view on economic growth and inflation. While both the current federal funds target rate and their commitment to USD 120billion in asset purchases per month was maintained, the Fed pulled forward its expectations of rate hikes to 2023, and mentioned that tapering was being discussed. Their updated economic projections also reflected a strong improvement in the broader economy and aggregate demand as vaccinations allow for a robust reopening. We continue to expect yields to grind higher. The strong economic growth, along with a still relatively accommodative monetary policy, should also continue to support equity markets, especially cyclical sectors.

FOMC June 2021 Forecasts*

Percent**

Source: Federal Reserve, J.P. Morgan Asset Management. *Forecasts of 18 FOMC participants, median estimate. ** Green denotes an adjustment higher, Red denotes an adjustment lower.
Data are as of 18/06/21.

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