Global Market Report - June 14

World markets were weaker as investors fretted over Chinese growth and the Fed's monetary policy

James Gard 14 June, 2018 | 11:11AM
Facebook Twitter LinkedIn


Following the Federal Reserve’s interest rate rise on Wednesday, global markets veered away from riskier assets. South Korea’s Kospi, which has been stuck in a band between 2,400 and 2,500 points for many months, dropped nearly 2% on the day. Not far behind in terms of losses were Japan’s Nikkei and Topix indices and Hong Kong’s Hang Seng. Despite the Fed’s hawkish turn, the retreat of the US dollar against major counterparts harmed the cause of Asia-Pacific equities.

Focusing on Chinese fundamentals, May’s industrial production and retail sales missed forecasts and the concern is that the country’s economic growth may be softening. China’s central bank was expected to follow the Federal Reserve in raising interest rates but held its fire.


Much better-than-expected UK retail sales numbers supported the pound – and by proxy, the prospect of an imminent interest rate rise – and this held back UK equities after an indifferent session the day before. Housebuilders were under pressure again and mining shares felt the impact of Chinese growth concerns.

All eyes are on the European Central Bank today. Much to the relief of financial journalists, who have endured many uneventful meetings in recent months, the ECB is expected to say something significant about the future of path of interest rates and the withdrawal of quantitative easing.

North America

The prospect of faster-than-expected monetary tightening unsettled US markets yesterday and investors expect more of the same today, in the absence of any other strong drivers, from economic or corporate news.

Nevertheless Fed chair Jerome Powell is acutely aware of spooking the markets by too much, too soon. “History has shown that moving interest rates either too quickly or too slowly can lead to bad economic outcomes," he said last night. Powell’s upbeat prognosis on the US economy should have supported global investors’ currently sanguine view of growth. At the same time, while world markets are at reasonably elevated levels, there is currently a skittishness to markets: a rise of 1% on the day is then followed by a fall of similar magnitude the next.

In corporate news, Adobe (ADBE) reports earnings and economics there is a range of weekly data, including retail sales and jobless claims.



The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Adobe Inc527.86 USD0.70Rating

About Author

James Gard

James Gard  is senior editor for


© Copyright 2024 Morningstar, Inc. All rights reserved.

Terms of Use        Privacy Policy        Modern Slavery Statement        Cookie Settings        Disclosures