Weekly Market Commentary - Chief Investment Office - Brooks Macdonald
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Chief Investment Office
Weekly
Market
Commentary
For professional advisers only
In Summary
Bond markets continue to drive equity market volatility as investors position for more aggressive monetary tightening
President Macron’s first round electoral results point to strong support however investors keep an eye on the second round
run-off
This week’s European Central Bank (ECB) meeting may not see any major policy change but markets will pay close attention
to the bank’s tone
Bond markets continue to drive equity market Macron ahead with a reasonable margin. Given how
volatility as investors position for more aggressive significantly the polling has changed over the last two
monetary tightening weeks however, this will remain a hot topic for European
risk assets.
Last week was dominated by the ongoing bond market selloff
as investors position for a rapid tightening in US monetary This week’s ECB meeting may not see any
policy. This concern has also filtered into other global bond major policy change but markets will pay close
markets as major central banks, including the ECB, point to attention to the bank’s tone
decade high inflation levels and an increased willingness Thursday’s ECB meeting is likely to be an eventful one given
to act decisively. Against this backdrop US equities the recent hawkish position from the European Central
underperformed, falling just over 1% whilst European equities Bank. At the ECB’s last meeting in March they announced
proved more resilient as investors ponder whether the Euro a faster reduction in asset purchases than the markets had
Area has sufficient economic momentum to allow the ECB to previously expected. The central question will be whether
tighten meaningfully1. the bank sees the current guidance as sufficient or if it wants
President Macron’s first round electoral results to increase the pace given the uncertainties around inflation
point to strong support however investors keep an levels. With the ink still not dry on the plan to reduce asset
eye on the second round run-off purchases, a meaningful change in policy this week is
unlikely, however the tone of the ECB’s messaging may take
Sunday saw a strong result from President Macron in the another hawkish step which could create bond volatility.
first round of voting with Marine Le Pen now entering the
run off against him in two weeks’ time. The French equity While the market will need to wait until May for the next
market is seeing some mild outperformance today, reflecting Federal Reserve (Fed) meeting, the US CPI data released this
the stronger showing from the incumbent versus ingoing week will be a factor in whether the Fed hikes by 25bps or
expectations. Of course, the critical question now is which 50bps in that meeting. This week also sees the beginning
candidate will gather the votes from the supporters of of the US Q1 earnings season which will give the market a
candidates eliminated in round one. Polling suggests a tight good barometer for corporate health and margins given the
run-off between the two candidates, but most polls show current inflation pressures.
Bloomberg, 7 April 2022 (https://www.bloomberg.com/news/articles/2022-04-07/stocks-set-for-steady-open-treasury-curve-steeper-
1
markets-wrap)
1 Weekly Market Commentary Monday 11 April 2022Economic indicators (week beginning 4 April)
Day Data Release Consensus Prior Actual
United States Durable Goods Orders Feb F -2.20% -2.20% -2.10%
Monday United States Factory Orders Feb -0.60% 1.40% -0.50%
Australia Melbourne Institute Inflation MoM Mar -- 0.50% 0.80%
Australia RBA Cash Rate Target 38443 0.10% 0.10% 0.10%
France Industrial Production MoM Feb -0.30% 1.60% -0.90%
Tuesday France Industrial Production YoY Feb 2.50% -1.50% 2.40%
United States Trade Balance Feb -$88.5b -$89.7b -$89.2b
France S&P Global France Services PMI Mar F 57.40 57.40 57.40
United States MBA Mortgage Applications 36982 -- -6.80% -6.30%
Wednesday
Germany Factory Orders MoM Feb -0.20% 1.80% -2.20%
United States Initial Jobless Claims 37347 200k 202k 166k
Thursday Germany Industrial Production SA MoM Feb 0.20% 2.70% 0.20%
Australia Trade Balance Feb A$11650m A$12891m A$7457m
Japan BoP Current Account Balance Feb ¥1450.0b -¥1188.7b ¥1648.3b
Friday
United States Wholesale Inventories MoM Feb F 2.10% 2.10% 2.50%
Source: Bloomberg, data accessed 11.04.22.
2 Weekly Market Commentary Monday 11 April 2022Economic indicators (week beginning 11 April)
Day Data Release Consensus Prior
China CPI YoY Mar 1.40% 0.90%
United Kingdom Industrial Production MoM Feb 0.30% 0.70%
Monday China PPI YoY Mar 8.10% 8.80%
United Kingdom Manufacturing Production MoM Feb 0.30% 0.80%
China Money Supply M2 YoY Mar 9.20% 9.20%
Germany ZEW Survey Expectations Apr -48.50 -39.30
United States CPI MoM Mar 1.20% 0.80%
Germany ZEW Survey Current Situation Apr -35.00 -21.40
United Kingdom Jobless Claims Change Mar -- -48.1k
Tuesday Japan PPI YoY Mar 9.20% 9.30%
Germany CPI YoY Mar F 7.30% 7.30%
United Kingdom ILO Unemployment Rate 3Mths Feb 3.80% 3.90%
Germany CPI MoM Mar F 2.50% 2.50%
United Kingdom Claimant Count Rate Mar -- 4.40%
United Kingdom CPI YoY Mar 6.70% -6.20%
United Kingdom CPI MoM Mar 0.80% 0.80%
Japan Core Machine Orders MoM Feb -1.50% -2.00%
Italy Industrial Production MoM Feb 1.00% -3.40%
Wednesday United States MBA Mortgage Applications 39539 -- -6.30%
United Kingdom CPI Core YoY Mar 5.30% 5.20%
United States PPI Final Demand MoM Mar 1.10% 0.80%
Australia Westpac Consumer Conf SA MoM Apr -- -4.20%
China Trade Balance Mar $21.70b $30.58b
United States Initial Jobless Claims 39904 173k 166k
Eurozone ECB Main Refinancing Rate 41730 0.00% 0.00%
Australia Unemployment Rate Mar 3.90% 4.00%
Australia Employment Change Mar 30.0k 77.4k
Thursday
United States U. of Mich. Sentiment Apr P 59.00 59.40
United States Retail Sales Advance MoM Mar 0.60% 0.30%
Eurozone ECB Deposit Facility Rate 41730 -0.50% -0.50%
Australia Participation Rate Mar 66.50% 66.40%
Italy CPI EU Harmonized YoY Mar F 7.00% 7.00%
France CPI YoY Mar F 4.50% 4.50%
Friday
United States Industrial Production MoM Mar 0.40% 0.50%
United States Empire Manufacturing Apr 1.00 -11.80
Source: Bloomberg, data accessed 11.04.22.
3 Weekly Market Commentary Monday 11 April 2022Asset market performance
As at Friday close YTD
Index Value CR TR CR TR
MSCI UK GBP 2205 2.01% 2.12% 5.94% 7.34%
MSCI USA USD 4291 -1.48% -1.46% -6.60% -6.34%
MSCI Europe ex UK EUR 180 0.02% 0.13% -7.90% -7.40%
MSCI AC Asia ex JPN USD 715 -1.55% -1.53% -9.44% -9.19%
MSCI Japan JPY 1170 -2.48% -2.48% -5.07% -4.16%
MSCI Emerging Markets USD 1128 -1.56% -1.53% -8.45% -8.07%
Barclays Sterling Gilts GBP 274 -1.62% -8.88%
GOLD USD 1948 1.14% 6.47%
WTI Oil USD 98 -1.02% 30.65%
MSCI PIMFA Income -0.24% -0.18% -2.96% -2.32%
MSCI PIMFA Balanced -0.22% -0.17% -2.61% -1.99%
MSCI PIMFA Growth -0.07% -0.01% -1.88% -1.27%
Source: Bloomberg, MSCI: please see important information, data accessed 11.04.22.
YTD denotes year to date, TR denotes total return and CR denotes capital return.
4 Weekly Market Commentary Monday 11 April 2022Important information The information in this document does not constitute advice or a recommendation and investment decisions should not be made on the basis of it. This document is for the information of the recipient only and should not be reproduced, copied or made available to others. The price of investments and the income from them may go down as well as up and neither is guaranteed. Investors may not get back the capital they invested. Past performance is not a reliable indicator of future results. The MSCI information may only be used for your internal use, may not be reproduced or re-disseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. (www.msci.com). Brooks Macdonald is a trading name of Brooks Macdonald Group plc used by various companies in the Brooks Macdonald group of companies. Brooks Macdonald Asset Management Limited is regulated by the Financial Conduct Authority. Registered in England No 3417519. Registered office: 21 Lombard Street, London EC3V 9AH. Brooks Macdonald Asset Management (International) Limited is licensed and regulated by the Guernsey Financial Services Commission. Its Jersey Branch is licensed and regulated by the Jersey Financial Services Commission. Brooks Macdonald Asset Management (International) Limited is an authorised Financial Services Provider, regulated by the South African Financial Sector Conduct Authority. Registered in Guernsey No 47575. Registered office: First Floor, Royal Chambers, St. Julian’s Avenue, St. Peter Port, Guernsey, GY1 2HH. Principal place of business in Jersey: 5 Anley Street, St Helier, Jersey, JE2 3QE. Brooks Macdonald Asset Management (International) Limited, Isle of Man Branch. Registered as a Foreign Company in the Isle of Man, No. 006370F. Business address: Third Floor, Exchange House, 54-62 Athol Street, Douglas, Isle of Man, IM1 1JD. Brooks Macdonald Asset Management (International) Limited, Isle of Man Branch is licensed by the Isle of Man Financial Services Authority and is registered with the Financial Services Authority in respect of Investment Business. More information about the Brooks Macdonald Group can be found at www.brooksmacdonald.com.
You can also read
