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

Guide to the Markets

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Key takeaways:

As we moved through the summer months, the pick-up in volatility that marked the second quarter eased off slightly. Meanwhile, the market consistently took a glass-half-full attitude towards the tit-for-tat trade war headlines, while the US economy continued to charge on full steam ahead.

Guide to the Markets presents a wide range of macroeconomic data that can help liquidity investors assess the economic backdrop and position their portfolios, covering issues including:

  • Lead indicators, such as the purchasing managers’ indices and GDP (p. 5, 21) have levelled off in the quarter, although they remain a few points lower than the above-trend growth levels seen at the start of the year.
  • The eurozone recovery remains broad-based and the cyclical momentum is still pointing towards relatively strong growth for 2018. With inflation, and specifically wage inflation, expected to pick up “in the coming months” we will be closely monitoring as upside surprises could point to faster normalisation in rates (p. 8, 24, 26).
  • With the tailwinds from the European growth engine finally fuelling a pick-up in inflation, the European Central Bank is clearly on track to raise interest rates. Headwinds emanating from external factors—trade war concerns or emerging market woes appear to be increasing—although currently the central bank still views risks to its growth projection as “broadly balanced“ and not tilted to the downside.

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