ECONOMIC AND MARKET OVERVIEW
Global
Risk appetite started the month on a positive note with many major equity indices recording all time highs during the month.
equity markets remain supported by very accommodative monetary and fiscal policies at a time where global economic growth is expected to increase at its fastest rate in decades Despite (and perhaps because of) lessening lockdown restrictions in the United States, Great Britain and most of Europe, it won’t be an easy ride to recovery as the Delta variant of the Coronavirus spreads at an alarming rate around the world. A subtle but noticeable change in the stance of the US Federal Reserve’s Open Market Committee (FOMC) following their mid-month statement added further uncertainty among investors. The market’s interpretation of the June FOMC meeting was that it underwent a “hawkish pivot” Interest rate expectations for 2023 jumped from no hikes to two hikes, the Q&A session confirmed that the Fed is “talking about talking about tapering” and that it has become less certain on the transitory nature of the current inflation surge. Immediately afterwards risk appetite moderated and volatility rose with a significant impact on emerging and currency markets.
Matrix Fund Managers reports that, towards the end of the month, Covid jitters increased amid the broadening prevalence of the Delta variant. This more contagious version of the Covid-19 virus has come at a time when the vaccine rollout in the developed world has lost pace, with levels still short of ensuring herd immunity Emerging Markets are notably worse off, with many of the middle to lower income countries having vaccinated less than 10% of their populations
