Standard Chartered Money Insights

Omicron has led investors to reassess their risk appetite. Latest reports indicate the new COVID variant is more transmissible and less severe than those from previous waves, but the impact on vaccine efficacy and hospitalisations remains unclear. This raises near-term uncertainty.

As investors, we have been here before. Despite several virus waves, the global stock market index has almost doubled from March 2020 pandemic lows. Authorities are better prepared today versus the first outbreak. While we need to keep a close eye on the latest wave, a bigger concern is how the outbreak impacts the inflation outlook and how the Fed responds to it. We still expect inflation to subside by the middle of next year, enabling the Fed to go slow on rate hikes after finishing bond purchases tapering. Thus, if Omicron plays out like the past waves, we would use any ensuing market volatility to pick up our preferred risk assets and longer-term structural themes.

Speakers:
- Marco Iachini, Cross-Asset Strategist, Standard Chartered Bank
- Abhilash Narayan, Senior Investment Strategist, Standard Chartered Bank

For more of our latest market insights, visit Market views on-the-go. 

Short JPY positioning has been stretched for a while now as most of the recent short bets within the G10 FX space have been concentrated here. Find out more for what this means for investors if risk sentiment remains fragile.

Speaker:
- DJ Cheong, Investment Strategist, Standard Chartered Bank

For more of our latest market insights, visit Market views on-the-go.

The US dollar has broken higher. What message is this leading indicator of global markets sending? There are three likely explanations for the dollar’s breakout, each with the potential to frame the market narrative in the coming months.

First, Jerome Powell’s renomination, against the backdrop of rising inflation expectations, sends a modestly hawkish message to markets. Second, the revival of the pandemic has undermined the EUR. The focus now turns to incoming German Chancellor Olaf Scholz and his revitalisation plan. Finally, a rebound in oil prices, despite a globally coordinated sale of strategic reserves by major buyers, could lift inflation expectations and put greater pressure on the Fed to react.

Speakers:
- Manish Jaradi, Senior Investment Strategist, Standard Chartered Bank
- Audrey Goh, Senior Cross-Asset Strategist, Standard Chartered Bank

For more of our latest market insights, visit Market views on-the-go.

In today’s episode, DJ shares his views on whether Fed Chair Powell's re-nomination means it’s policy status quo for the Fed and whether this implies further USD strength in the weeks ahead.

Speaker:
- DJ Cheong, Investment Strategist, Standard Chartered Bank

For more of our latest market insights, visit Market views on-the-go.

The bull market in risk assets just crossed a major milestone – global equities, as measured by the MSCI All Country World index, has doubled since the pandemic low. The question now confronting investors: what will sustain the rally? 

We believe the fuel that has powered the bull so far – strong economic and corporate earnings growth, driven by above-trend consumer demand and easy financial conditions – will last for the next 6-12 months. The acceleration in US retail sales last month, despite inflation running at 30-year highs, shows the strength of US consumer demand.

Speakers:
- Marco Iachini, Cross-Asset Strategist, Standard Chartered Bank
- Fook Hien Yap, Senior Investment Strategist, Standard Chartered Bank
 
For more of our latest market insights, visit Market views on-the-go.

The precious metal has recently staged a technical breakout on the back of solid US CPI figures. Have the fundamentals changed, and should investors latch on to the recent rally?

Speaker:
- DJ Cheong, Investment Strategist, Standard Chartered Bank

For more of our latest market insights, visit Market views on-the-go.

The breakout of US inflation to a 30-year high and broadening of price pressures globally have challenged the central bank narrative that inflation is transitory. Nevertheless, several central banks, led by the Fed and BoE, have made it clear in recent weeks that their priority remains healing job markets, rather than fighting near-term inflation pressures.

The decidedly dovish near-term monetary policy outlook, combined with the surprisingly strong rebound in US job creation in October,  leave us constructive on risk assets over the next 6-12 months.

Speakers:
- Manish Jaradi, Senior Investment Strategist, Standard Chartered Bank
- Abhilash Narayan, Senior Investment Strategist, Standard Chartered Bank

For more of our latest market insights, visit Market views on-the-go. 

Central banks are shifting away from ultra-easy monetary policies, but they have mostly pushed back against expectations for higher interest rates next year. In light of that, today’s episode will span a broad review of what central banks did last week, and how it feeds into currency markets.

Speaker:
- DJ Cheong, Investment Strategist, Standard Chartered Bank

For more of our latest market insights, visit Market views on-the-go.

The Fed’s decision to start tapering bond purchases from this month has been received well by investors. Global stocks hit a new record high and Treasury yields and the USD remained range-bound as investors continued to focus on strong corporate earnings beats. We expect easy financial conditions to prevail and growth and earnings to continue surprising positively over the next 6-12 months, helping equities outperform bonds and cash.

Speakers:
- Fook Hien Yap, Senior Investment Strategist, Standard Chartered Bank
- Marco Iachini, Cross-Asset Strategist, Standard Chartered Bank

For more of our latest market insights, visit Market views on-the-go.

We believe it is still attractive to buy the AUD on dips as terms of trade remain supportive for the AUD. However, the currency needs to first work its way out of overbought territory.

Speaker:
- DJ Cheong, Investment Strategist, Standard Chartered Bank

For more of our latest market insights, visit Market views on-the-go.