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Epic Investment Partners Views: The Week Ahead

The key events this week include the US presidential race, US Treasury Secretary Yellen (Tue) and Fed Chair Powell’s (Tue and Wed) testimonies, China CPI and PPI (Wed), US CPI (Wed), China trade data (Friday), and Uni. of Michigan consumer sentiment and US PPI (Fri). 

Markets will look for policy direction from central bank members this week, including: the BoE’s Haskel (Mon), Pill and Mann (Tue), and the Fed’s Goolsbee and Bowman (Tue), and Bostic and Musalem (Thu). 

Last week, markets grappled with politics, central bank chatter and some key data points. The yield on the 10-year rallied 12bps, amid the broadly cooler labour market data. The S&P Index soared to new highs, gaining 1.95% over the week. The dollar (DXY Index) fell 0.94% last week, on softer US data and less hawkish Fed rhetoric. Meanwhile, Brent crude closed marginally higher over the week closing at 86.54pb, amid the easing geopolitical backdrop.  

During his speech at the ECB Forum, Fed Chair Powell stated that the US is back on a “disinflationary path,” providing a boost to investor sentiment. Powell also warned that US debt growth is on an unsustainable path. Next, the FOMC minutes from the June meeting appeared more dovish, primarily focused on the labour market, and slowing economic growth. However, as expected, members reiterated a cautious approach to rate cuts.  

US data through the week painted a mixed economic picture, the ISM manufacturing index declined in June, while the new orders and employment prints dropped below the crucial 50-point threshold. The ISM services were also hugely disappointing, falling into contraction with the employment figure dropping to 46.1. Next, we had the employment print, where, in June, 206k jobs were added (exp. 190k). Unemployment ticked up to 4.1% and average hourly earnings eased to 3.9%yoy; consistent with a cooling labour market. Market odds for a cut in September chopped and changed through the week, closing at ~77% on Friday, and currently stand at 71% this morning.  

Elsewhere, the eurozone grappled with its own economic challenges. CPI was estimated to have decelerated to 2.5%yoy in June, but core inflation remained sticky at 2.9%. ECB President Christine Lagarde struck an optimistic tone in Sintra, predicting inflation would be “in the low twos” within a year. Elsewhere, France woke up to looming political gridlock this morning as the left coalition’s victory in Sunday’s legislative elections prevented a far-right surge, risking political deadlock in France, with neither party attaining a clear majority.  

In China, the PBoC has initiated measures to curb the recent bond market rally, announcing plans to borrow and potentially sell government bonds to regulate long-term interest rates. This strategy aims to manage financial institution risks, prevent yield curve inversion, and control the interest rate gap with the US. The move has already led to a rebound in 10-year and 30-year government bond yields. While the PBoC’s current focus is on bond sales, future bond purchases could become a new liquidity management tool. Concurrently, China’s economy shows mixed signals, with early signs of recovery in property transactions and strong growth in port cargo handling, while facing challenges such as the European Commission’s decision to impose temporary anti-subsidy tariffs on Chinese electric vehicles. 


Epic Investment Partner’s Key risks & Disclaimers:

EPIC Global Equity Fund (the “Fund”) is a sub-fund of EPIC Funds p.l.c. (the “Company”), which is an open-ended umbrella fund authorised in Ireland as a UCITS fund and regulated by the Central Bank of Ireland. This marketing material has been approved in the UK by EPIC Markets (UK) LLP, trading as EPIC Investment Partners, which is a limited liability partnership incorporated and registered in England and Wales under partnership OC306260 with its registered office at Audrey House, 16-20 Ely Place, London EC1N 6SN. EPIC Markets (UK) LLP is regulated by the Financial Conduct Authority. Distribution of this material and the offer of the Fund are specifically restricted in certain jurisdictions. In particular, but without limitation, neither this material nor shares in the Fund are available to US persons.

This document is for general information purposes only and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. It is not a personal recommendation and it should not be regarded as a solicitation or an offer to buy or sell any shares in the Fund. This document represents the views of EPIC Investment Partners at the time of writing. It should not be construed as investment advice. Any person interested in investing in the Fund should conduct their own investigation and analysis of the Fund and should consult their own professional tax, accounting or other advisers as to the risks involved in making such an investment. Full details of the Fund’s investment objectives, investment policy and risks are set out in the Fund’s Prospectus and Supplement which, together with the Key Information Document (“KID”), are available on request and free of charge from Maples Fund Services (Ireland) Limited, 32 Molesworth Street, Dublin 2, Ireland and, in the UK, from EPIC Markets (UK) LLP, Audrey House, 16-20 Ely Place, London EC1N 6SN. Any offering of the Fund is only made on the terms of the current Prospectus, Supplement and KID. A subscription in the Fund can only be made after the provision of the KIID and should be made solely upon the information contained in the Prospectus, Supplement and KID.

An investment in the Fund is not suitable for an investor who cannot sustain a loss on their investment. There is no guarantee of the Fund’s future performance and past performance is not a reliable indicator of future performance. The value of your investment and the income derived from it can go down as well as up, and you may not get back the money you invested. The risks associated with making an investment in the Fund are described in the Prospectus and Supplement but investors should note, in particular, the following: 1) Foreign currency denominated investments are subject to fluctuations in exchange rates that could have a positive or an adverse effect on an investor’s returns. There is also a risk that currency hedging transactions for one share class may in extreme cases adversely affect the net asset value of the other share classes within the same sub-fund since there is no legal segregation between share classes; 2) The Fund is subject to the risk of the insolvency of its counterparties; and 3) Emerging market securities are subject to greater social, political, regulatory, and currency risks than developed market securities. This may impact the liquidity and value of such securities and, consequently, the value of the Fund.


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This information has been accurately reproduced, as received from EPIC Investment Partners. No information has been omitted which would render the reproduced information inaccurate or misleading. This information is being distributed by MeDirect Bank (Malta) plc to its customers. The information contained in this document is for general information purposes only and is not intended to provide legal or other professional advice nor does it commit MeDirect Bank (Malta) plc to any obligation whatsoever. The information available in this document is not intended to be a suggestion, recommendation or solicitation to buy, hold or sell, any securities and is not guaranteed as to accuracy or completeness.

The financial instruments discussed in the document may not be suitable for all investors and investors must make their own informed decisions and seek their own advice regarding the appropriateness of investing in financial instruments or implementing strategies discussed herein.

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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.

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