https://www.scmp.com/rss/327320/feed Hannah Anderson is a global market strategist at JP Morgan Asset Management. She is on the Global Market Insights Strategy team, based in Hong Kong. In this role, she is responsible for developing and communicating timely market and economic insights to retail and institutional clients across Asia Pacific, with a particular focus on China’s evolving financial system, global trade, and US-China relations. en https://assets.i-scmp.com/static/img/icons/scmp-meta-1200x630.png https://www.scmp.com Fears related to the global spread of Covid-19 continue to grip markets. Several economies are at a standstill, volatility reigns and a general sense of unease permeates almost every corner of our lives. Such are the consequences of a public health crisis which precipitates an economic downturn. These two together plus the additional issue of problems in the world’s financial plumbing and doubts about the effectiveness of several governments at containing the spread of the disease have pushed... https://www.scmp.com/comment/opinion/article/3075963/coronavirus-has-created-unprecedented-market-environment-do-usual?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3075963/coronavirus-has-created-unprecedented-market-environment-do-usual?utm_source=rss_feed Fri, 20 Mar 2020 08:00:05 +0000 This past week has not gone as expected. By the time of writing, I had thought, surely I would have something insightful to say about the upcoming United States presidential election. However, as a result of a lack of results from the Democratic Party’s Iowa caucuses, I know precisely what I already knew at the start of the week. There is a parable in there somewhere about relying too much on one event to make investment decisions, or about overinterpreting data from a small sample size – a... https://www.scmp.com/comment/opinion/article/3049387/us-presidential-primaries-iowa-delay-reminder-investors-steer-clear?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3049387/us-presidential-primaries-iowa-delay-reminder-investors-steer-clear?utm_source=rss_feed Sat, 08 Feb 2020 04:00:20 +0000 Heading into the new year, I have been thinking a lot about monetary policy. The amount of liquidity provided to markets in recent years has supported higher equity valuations and kept yields low (and thus, fixed-income prices elevated). The direction that central bank policies take in 2020 is an essential consideration when making investment decisions. All signs point to the United States Federal Reserve continuing to keep interest rates steady, with greater monetary easing from the European... https://www.scmp.com/comment/opinion/article/3044375/chinas-central-bank-eases-2020-firm-grip-loose-liquidity?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3044375/chinas-central-bank-eases-2020-firm-grip-loose-liquidity?utm_source=rss_feed Fri, 03 Jan 2020 04:00:14 +0000 Tariffs levied by the US and China on each other might be grabbing headlines, but other developments in international trade are worth watching, too. Trade will continue to shape the market outlook in the coming year and beyond. There are two clear channels through which trade tensions feed into markets: costs and confidence. Raising tariffs increases the costs borne by importers, who either pass these along to consumers in the form of higher prices or accept lower margins. This has an effect on... https://www.scmp.com/comment/opinion/article/3041865/us-tariff-flip-flops-and-neutered-wto-will-hit-trade-and-business?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3041865/us-tariff-flip-flops-and-neutered-wto-will-hit-trade-and-business?utm_source=rss_feed Fri, 13 Dec 2019 17:00:09 +0000 Annual meetings provide an opportunity to check the progress of key initiatives and set priorities in the coming year. Today, two particular sets of these type of meetings deserve special attention, for interrelated reasons. The US third quarter earnings season is well under way, with its associated gatherings of investors. China’s fourth plenum took place this past week as well. Though these meetings serve different purposes, the leaders involved in each faced the same essential question: can... https://www.scmp.com/comment/opinion/article/3035566/what-us-earnings-season-and-chinas-fourth-plenum-have-common?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3035566/what-us-earnings-season-and-chinas-fourth-plenum-have-common?utm_source=rss_feed Fri, 01 Nov 2019 03:00:12 +0000 History has a tendency to repeat itself. This is what makes formulating successful investment strategies possible, at least most of the time. But the expectation that historical patterns will re-emerge can be a trap for those not looking at the whole picture. A rising sense of déjà vu can lull people into a false sense of security, without recognising that this time may be different enough to yield an alternative outcome. Markets may be beginning to follow that pattern when it comes to US-China... https://www.scmp.com/comment/opinion/article/3033369/pattern-us-china-trade-talks-has-been-predictable-markets-reaction?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3033369/pattern-us-china-trade-talks-has-been-predictable-markets-reaction?utm_source=rss_feed Fri, 18 Oct 2019 13:00:08 +0000 Geopolitics might as well be the theme of the year. United States-China. Brexit. Argentina. Italy. South Korea-Japan. US-Iran. Hong Kong. Each of these geopolitical flashpoints has roiled markets in recent months. New headlines invariably result in local equity market sell-offs and rallies in high-quality fixed income. Currencies are often the biggest movers; liquid markets and round-the-clock pricing mean foreign exchange markets often have time to react before political developments can be... https://www.scmp.com/comment/opinion/article/3025923/us-china-britain-argentina-geopolitics-are-roiling-markets-starting?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3025923/us-china-britain-argentina-geopolitics-are-roiling-markets-starting?utm_source=rss_feed Fri, 06 Sep 2019 19:00:04 +0000 Markets have had an uncomfortable two weeks – largely because of the US government’s continued escalation of its trade war with China. Two major developments necessitate further reflection: new upcoming tariffs and the designation of China as a currency manipulator. Tariffs may be economically significant, but they are unlikely to weigh on trade negotiations. Meanwhile, designating China as a currency manipulator doesn’t change either side’s economic outlook, but it will be a major issue in... https://www.scmp.com/comment/opinion/article/3021997/aimed-china-trumps-trade-war-shots-keep-businesses-and-investors?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3021997/aimed-china-trumps-trade-war-shots-keep-businesses-and-investors?utm_source=rss_feed Fri, 09 Aug 2019 17:00:12 +0000 Trade concerns will continue to plague markets for the rest of 2019 and well beyond. This is not only the result of the US government’s shift towards more protectionist policies, but also due to the effects of slowing global growth on international trade. Setting aside the US-China trade dynamic – but only momentarily, as this situation is one of the most important considerations when making asset allocation decisions this year – markets care about trade because of what it signals for business... https://www.scmp.com/comment/opinion/article/3017351/despite-trump-and-xis-g20-handshake-trade-woes-will-remain-drag?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3017351/despite-trump-and-xis-g20-handshake-trade-woes-will-remain-drag?utm_source=rss_feed Fri, 05 Jul 2019 19:00:10 +0000 The bond market has started to flash what could be a warning sign as interest rates on longer-term United States government bonds – also known as Treasury bills – fall below those on short-dated bonds. This phenomenon is known as a yield curve inversion, and often signals a worsening economic outlook in the medium term, or even a recession. Investors often compare the interest rates, or yields, on shorter-dated Treasury bills – such as those maturing in three months or two years – with those on... https://www.scmp.com/comment/opinion/article/3012502/bond-market-flashes-recession-warning-its-not-time-yet-panic?utm_source=rss_feed https://www.scmp.com/comment/opinion/article/3012502/bond-market-flashes-recession-warning-its-not-time-yet-panic?utm_source=rss_feed Fri, 31 May 2019 04:35:11 +0000 Chinese equities started April 2019 at almost exactly the same level as they began April 2018. The renminbi’s sharp rebound from the end of last year looks likely to continue. And Chinese bonds appear unlikely to top a stellar 2018. While all three of these assets demonstrate wildly different fundamentals and the outlook appears markedly different on each, it is clear that investors are broadly optimistic about China in 2019. How do I know? Recent reserves data clearly shows increasing investor... https://www.scmp.com/comment/insight-opinion/article/3005675/chinas-equities-are-suddenly-soaring-along-its-bonds-it-too?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/article/3005675/chinas-equities-are-suddenly-soaring-along-its-bonds-it-too?utm_source=rss_feed Fri, 12 Apr 2019 03:00:11 +0000 Over the past three months, equity markets have given investors plenty to get excited about and plenty more to worry about. The dive most equity markets took last December set up a big rally in the first weeks of the year. The first week of March gave many investors déjà vu when major markets all fell by over 1 per cent within the week. Corporate bond spreads widened and safe-haven assets, like gold, rallied. Then markets reversed again with a strong week in risk assets. Yet, looking over a... https://www.scmp.com/comment/insight-opinion/united-states/article/3001727/its-too-soon-investors-stop-worrying-about?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/united-states/article/3001727/its-too-soon-investors-stop-worrying-about?utm_source=rss_feed Fri, 15 Mar 2019 03:28:48 +0000 “Crosscurrents” seems to be the buzzword for global markets in 2019. And one of the oft-mentioned risks for 2019 is the ongoing slowdown in China. Crosscurrents is also an apt descriptor for what is happening within the Chinese economy. On the one hand, the government aims to support the economy. On the other hand, the importance of controlling systemic risks limits the use of old tools. A variety of economic indicators has provided conflicting signals, fiscal and monetary policies may appear to... https://www.scmp.com/comment/insight-opinion/united-states/article/2186158/china-government-policies-tell-us-more-about?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/united-states/article/2186158/china-government-policies-tell-us-more-about?utm_source=rss_feed Fri, 15 Feb 2019 04:00:45 +0000 At the end of a calendar year, it’s natural to take stock of the past year and adjust one’s expectations for the future. At the close of 2018, that process was rather unpleasant for most of us and raised more questions than it answered. Why was 2018 so tough for risk assets? Does the market know something we don’t about the economy in 2019? And, if the economic outlook is relatively stable, but markets are still moving in a risk-averse direction, is there a point at which deteriorating... https://www.scmp.com/comment/insight-opinion/united-states/article/2180529/danger-2019-markets-dim-view-economy-may?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/united-states/article/2180529/danger-2019-markets-dim-view-economy-may?utm_source=rss_feed Fri, 04 Jan 2019 02:30:30 +0000 Did we just see a concrete harbinger of a future economic recession? That’s what markets have been discussing all week. Movement in the shape of the US Treasury yield curve (a line that plots interest rates and is often used to predict changes in economic output or growth) was the big talking point. The yield curve actually inverted in the middle part, meaning that yields on shorter-maturity bonds were above longer-dated ones. This happened in part because new information about what we can... https://www.scmp.com/comment/insight-opinion/united-states/article/2177641/signs-point-us-recession-when-answer-probably?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/united-states/article/2177641/signs-point-us-recession-when-answer-probably?utm_source=rss_feed Fri, 14 Dec 2018 15:00:15 +0000 Risk assets have faced a good number of difficulties this year, but one of the few assets bucking that trend is oil. Modest global growth kept demand stable, while suppliers continued to exhibit caution around increasing production – many still no doubt wary of creating a glut similar to the one seen in 2015 and 2016 (and the accompanying low prices). As a result, investors pushed oil prices higher in the first 10 months of the year. Indeed, oil was one of the top performing assets at the end of... https://www.scmp.com/comment/insight-opinion/united-states/article/2173390/what-rise-and-fall-oil-prices-says-about-asset?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/united-states/article/2173390/what-rise-and-fall-oil-prices-says-about-asset?utm_source=rss_feed Fri, 16 Nov 2018 03:15:45 +0000 Ever since I moved to Hong Kong, any headline related to Asia in the local news prompts my parents to reach out. For them, Asia really only makes the headlines in the event of extreme weather or a natural disaster – earthquakes, in particular, receive a lot of coverage. Any tremor, no matter how small or how far away from Hong Kong, warrants a call. Given the US Geological Survey has recorded more than 10,700 earthquakes so far this year, the vast majority in the Pacific Rim, I have received a... https://www.scmp.com/comment/insight-opinion/article/2169173/saudi-crisis-trade-war-rising-interest-rates-there-are?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/article/2169173/saudi-crisis-trade-war-rising-interest-rates-there-are?utm_source=rss_feed Fri, 19 Oct 2018 03:00:00 +0000 Markets are fickle by nature – what captures investor attention one day doesn’t even make the top 10 list of most-important items to watch the next. These short attention spans can make it tough to figure out what precisely is behind any day’s moves. It also makes it difficult to tell how a shift in the fundamentals will affect markets beyond investors’ reactions to the initial news – by the time a change in fundamentals actually alters market conditions, attentions have moved on. I experienced... https://www.scmp.com/comment/insight-opinion/united-states/article/2165035/us-china-trade-war-rages-investors-must-not?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/united-states/article/2165035/us-china-trade-war-rages-investors-must-not?utm_source=rss_feed Fri, 21 Sep 2018 19:03:41 +0000 Worries about internal and external fragilities recently sparked a steep slide in the Turkish lira. And a weakening economy and a large current account deficit prompted a sell-off in the Argentinian peso. As these events grabbed headlines, investors are searching for opportunities in other emerging economies, which are, nevertheless, similarly under stress. Since April, the Chinese renminbi has suffered some of the biggest declines of any currency in Asia (down 9 per cent since April 1). Does... https://www.scmp.com/comment/insight-opinion/united-states/article/2162076/chinas-steady-hand-falling-yuan-bolsters?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/united-states/article/2162076/chinas-steady-hand-falling-yuan-bolsters?utm_source=rss_feed Fri, 31 Aug 2018 18:30:50 +0000 Just as reporters are quick to attach the suffix “-gate” to any story with the whiff of scandal, investors are keen to label any disruption to markets a “war”; recall that around the implementation of broad quantitative easing programmes, we had the “battle of the banks”, or how rising US protectionism quickly became a “trade war”. Over the past couple of weeks, more investors have been asking me if we are in the early stages of a currency war. “Currency war”, like “trade war”, is a loaded term.... https://www.scmp.com/business/article/2159037/were-not-currency-war-yet-even-if-market-fluctuations-have-been-unexpected?utm_source=rss_feed https://www.scmp.com/business/article/2159037/were-not-currency-war-yet-even-if-market-fluctuations-have-been-unexpected?utm_source=rss_feed Fri, 10 Aug 2018 07:00:30 +0000 I make terrible decisions when I’m anxious. A trip to the dentist fills me with dread. Seeing an upcoming appointment, I am more likely to cancel than just get it over with. This provides temporary peace of mind, but negatively has an effect on my long-term health.  Right now, investors are anxious – anxious about US policy changes, about the global business cycle, about market sentiment, and again, anxious about stability in China. But they should realise that taking a deep breath and going... https://www.scmp.com/comment/insight-opinion/united-states/article/2155080/if-us-trade-war-has-made-investing-financial?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/united-states/article/2155080/if-us-trade-war-has-made-investing-financial?utm_source=rss_feed Fri, 13 Jul 2018 05:00:45 +0000 This week in trade has felt a bit like the calm in between summer typhoons here in Hong Kong; nice to have a break from the rain, but we know the next storm is just around the corner. The week has contained a merciful lack of trade headlines, but sandwiched between the unsatisfying conclusion of last week’s round of trade talks in Beijing and next week’s release of the final product list of US$50 billion of Chinese imports on which the US will apply a 25 per cent tariff, this is likely to be an... https://www.scmp.com/comment/insight-opinion/article/2149768/calm-storm-ongoing-us-china-trade-tensions-leave-markets-and?utm_source=rss_feed https://www.scmp.com/comment/insight-opinion/article/2149768/calm-storm-ongoing-us-china-trade-tensions-leave-markets-and?utm_source=rss_feed Fri, 08 Jun 2018 03:00:20 +0000