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Epic Investment Partners Views: The Week Ahead

There will be plenty for markets to chew on this week with US PPI (Tue) and CPI (Wed), eurozone GDP (Wed), UK CPI (Wed) and China data (Thu). Earnings reports from China’s large e-commerce companies, and US retailers Home Depot and Walmart will also be scrutinised. Fed rhetoric will be in sharp focus this week. The Fed’s Bostic will discuss the economic outlook (Tue), Musalem will speak on the US economy and monetary policy (Thu), we will also hear from Harker (Thu), and Goolsbee (Fri).   

A fairly quiet start to the week sees the US budget balance later today. UK employment figures and US PPI follow on Tuesday, and Home Depot earnings may provide more colour on the outlook of the consumer. A busy day Wednesday sees the release of eurozone GDP and industrial production, and UK and US CPI prints. We will also have UBS Group and Tencent earnings. On Thursday, China data includes home prices, retail sales and industrial production. Japan and UK GDP figures, and later US retail sales and industrial production readings will also attract market focus. Earnings reports include Alibaba and Walmart. US housing starts and Uni. of Michigan consumer sentiment are due on Friday.  

A rollercoaster week for asset classes witnessed a massive turnaround, particularly for equity markets. Having started on the back foot on Monday, as markets digested the weaker than expected US jobs data, then the unwinding of the Japanese yen carry trade took hold. The VIX Index, a measure of volatility spiked up to levels not seen since the Global Financial Crisis, in 2008. Having hit an intraday high of 65.73 on Monday, the VIX simmered to 20.37 by Friday’s close. The S&P Index, having lost 6% on Monday, pared losses, closing marginally up on the week. Meanwhile, UST yields moved higher from the year lows reached a week earlier. The 10-year benchmark closed 15bps higher at 3.94%. The dollar (DXY Index) closed the week 0.07% lower, and Brent enjoyed a 3.71% rally to $79.66pb. 

Last week we heard from the Fed’s Schmid, who said he is not ready to support a cut in US rates with inflation still above target, adding that the labour market is still healthy despite some signs of cooling.  Later Bowman said: “inflation is still uncomfortably above the committee’s 2% target”, adding, “I will remain cautious in my approach to considering adjustments to the current stance of policy”. Separately, Fed’s Collins noted that “if the data continues the way that I expect, I do believe it will be appropriate soon to begin adjusting policy and easing how restrictive the policy is”. At time of writing, this morning market are pricing in a 50bps cut in September. 

In China, PPI stagnated at 0.8%yoy in July, while CPI beat expectations, rising 0.5%yoy, bolstered by pork prices. China’s central bank, in its 2Q monetary policy report, emphasised a flexible prudent monetary policy aimed at ensuring stable growth through enhanced macroeconomic policy consistency and counter-cyclical adjustments. The report highlighted the bank’s focus on balancing internal and external factors, maintaining price stability, and guarding against financial risks. The PBoC will support the housing market and monitor global monetary policies, with potential easing opportunities emerging after expected Fed rate cuts. Recent data shows a slight reacceleration in CPI, driven by food prices and seasonal travel demand, whilst export growth slowed and import growth accelerated. The bank also addressed concerns about bond fund risks and announced investigations into smaller banks for market violations. Overall, the PBoC aims to navigate economic challenges whilst supporting key sectors and maintaining financial stability. 


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.


MeDirect Disclaimers:

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 is intended for retail clients however, it 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.

If you invest in this product you may lose some or all of the money you invest. The value of your investment may go down as well as up. A commission or sales fee may be charged at the time of the initial purchase for an investment. Any income you get from this investment may go down as well as up. This product may be affected by changes in currency exchange rate movements thereby affecting your investment return therefrom. The performance figures quoted refer to the past and past performance is not a guarantee of future performance or a reliable guide to future performance. Any decision to invest in a mutual fund should always be based upon the details contained in the Prospectus and Key Information Document (KID), which may be obtained from MeDirect Bank (Malta) plc.

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