News & Updates

This week’s key events include China’s Third Plenum, the ECB rate decision, US bank earnings, and several significant economic data releases from the US, Eurozone, and UK.. Last week, Fed Chair Powell highlighted progress on inflation but emphasised caution in rate cuts, while China’s economic recovery showed signs of weakness with lower-than-expected inflation and GDP growth.

Developed market central banks, like the Fed and Bank of England, are anticipated to keep interest rates higher for longer due to persistent inflation, following the lead of some emerging market central banks that have paused their rate cuts. Despite recent cuts and high rates, emerging markets face limitations on further rate reductions, influenced by factors such as government policies and global economic conditions.

This week, the economic spotlight shifts to pivotal events including testimonies from US Treasury Secretary Yellen and Fed Chair Powell, as well as critical data releases from China and the US. Amidst ongoing market volatility, investors are keenly watching for policy signals from central bank leaders and assessing the impact of recent geopolitical and economic developments.

The higher-for-longer rate environment has enhanced income opportunities in various bonds, making short-term bonds particularly attractive for long-term investors, with Blackrock favoring European and private credit over U.S. and public options, while preferring equities for risk exposure in overall portfolios.