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4
China: Economic snapshot | 7GTM - Asia
7
25
30
35
40
45
50
55
60
65
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
-20%
-10%
0%
10%
20%
30%
40%
50%
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
Contribution to real GDP growthYear-over-year change
Caixin/Markit Purchasing Managers’ IndicesLevel
Electricity consumptionYear-to-date, year-over-year change
Source: J.P. Morgan Asset Management; (Left) CEIC, National Bureau of Statistics of China; (Top right) Caixin/Markit, J.P. Morgan Economic Research; (Bottom right) CEIC, China Electricity Council. PMIs are relative to 50, which indicates deceleration (below 50) or acceleration (above 50) of the sector.Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
Net exports
Gross capital formation (investment)
Consumption
GDP
Secondary
Tertiary
5/2020: -6.3%
5/2020: -4.0%
Manufacturing
Services
6/2020: 55.0
1Q2020: -6.8%
6/2020: 51.2
-8%
-4%
0%
4%
8%
12%
16%
20%
'80 '85 '90 '95 '00 '05 '10 '15 '20
5
Global Purchasing Managers’ Index (PMI) | 13GTM - Asia
13
20
25
30
35
40
45
50
55
60
65
'99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19
Source: Australian Industry Group, Institute for Supply Management, J.P. Morgan Economic Research, Markit, J.P. Morgan Asset Management.PMIs are relative to 50, which indicates deceleration (below 50) or acceleration (above 50) of the sector. Heatmap colors are based on PMI relative to the 50 level, with green (red) corresponding to acceleration (deceleration). *Developed market includes Australia, Canada, Denmark, euro area, Japan, New Zealand, Norway, Sweden, Switzerland, UK and the U.S. **Emerging market includes Brazil, Chile, China, Colombia, Croatia, Czech Republic, Hong Kong SAR, Hungary, India, Indonesia, Israel, Korea, Malaysia, Mexico, Philippines, Poland, Romania, Russia, Saudi Arabia, Singapore, South Africa, Taiwan, Thailand, Turkey and Vietnam. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
Global manufacturing and services PMIIndex
Global manufacturing PMI breakdown
Manufacturing
Services
Lowest point 4/20: 23.7
Lowest point 4/20: 39.6
Ju
l '1
9
Au
g '19
Sep
'19
Oct
'19
No
v '19
Dec '19
Jan
'20
Feb
'20
Mar
'20
Ap
r '2
0
May '20
Ju
n '20
Global 42.4 47.8
DM* 39.5 46.4
EM** 45.4 -
U.S. (Markit) 39.8 49.8
U.S. (ISM) 43.1 52.6
Euro area 39.4 47.4
Germany 36.6 45.2
France 40.6 52.3
Italy 45.4 47.5
Spain 38.3 49.0
UK 40.7 50.1
Australia 44.0 51.2
Japan 38.4 40.1
China (Markit) 50.7 51.2
China (NBS) 50.6 50.9
Korea 41.3 43.4
Taiwan 41.9 46.2
Indonesia 28.6 39.1
India 30.8 47.2
Russia 36.2 49.4
Brazil 38.3 51.6
Mexico 38.3 38.6
# markets above 50 3 6 6 6 5 7 7 7 3 0 1 5
6
Central bank policy rates | 18GTM - Asia
18
Source: J.P. Morgan Asset Management; (Left) FactSet; (Right) BIS. G4 are the Bank of England, the Bank of Japan (BoJ), the European Central Bank and the U.S. Federal Reserve. *Key deposit rates that central banks charge commercial banks on their excess reserves. **The BoJ has adopted a three-tier system in which a negative interest rate of -0.1% will be applied to the policy rate balance of the aggregate amount of all financial institutions that hold current accounts at the BoJ. ***Count covers the 38 central banks included in the Bank for International Settlements’ central bank policy monitor. Year-to-date data reflect most recently available as of 24/06/20. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
Policy rateDeposit
rate*
Eurozone 0.0% -0.5%
Japan** -0.1 to 0.0% -0.1%
UK 0.1% 0.1%
U.S. 0.0 to 0.25% 0.1%
Changes in central bank policy ratesNumber of hikes or cuts***
G4 central bank key policy ratesPer annum
Developed markets
Emerging marketsRate hikes
Rate cutsDeveloped markets
Emerging markets
-200
-150
-100
-50
0
50
100
150
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 YTD'20
7
United States: Business cycle thermometer | 25GTM - Asia
25
0
25
50
75
100
ConsumerConfidence
WageGrowth
NonfarmPayrolls
HousingStarts
Light VehicleSales
BusinessConfidence
Capex DurableOrders
IndustrialProduction
LeadingEconomic
Index
CreditConditions
Example
Source: BEA, Conference Board U.S., FactSet, U.S. Census Bureau, U.S. Department of Labor, Wards Intelligence, J.P. Morgan Asset Management.Indicators are: Consumer Confidence – Monthly survey index of how consumers perceive their own financial status and the general economy; Wage Growth – Average hourly earnings of production and non-supervisory workers; Nonfarm Payrolls – Monthly change in U.S. nonfarm employment (three-month moving average); Housing Starts – Number of private housing units that construction has started within a specified timeframe; Light Vehicle Sales – Cars and passenger trucks sold in a given month; Business Confidence –Monthly survey of Chief Executive Officers about their outlook for the economy; Capex – Monthly new orders of non-defense capital goods (excluding aircraft); Durable Orders –Monthly new orders of durable goods in the manufacturing sector, seasonally adjusted; Industrial Production – Monthly output of the industrial sector; Leading Economic Index – An index aggregating values of 10 key variables intended to forecast future U.S. economic activity; Credit Conditions – Leading Credit Index that aggregates performance of six financial market instruments to track credit conditions in the U.S. economy.Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
U.S. business cycle indicatorsCurrent percentile rank relative to range of data since Jan. 1990
Consumers Businesses
3
months
ago
Latest
Ele
va
ted
Retre
nched
8
United States: Monetary policy | 29GTM - Asia
29
0.04% -0.02% 0.01%
0.10% 0.10% 0.10%
2.50%
-1%
0%
1%
2%
3%
4%
5%
6%
'06 '08 '10 '12 '14 '16 '18 '20 '22
Source: Bloomberg Finance L.P., FactSet, U.S. Federal Reserve, J.P. Morgan Asset Management.Market expectations are the federal funds rates priced into the Fed Fund futures market as of 30/06/20. Federal Reserve projections shown are the median estimates of Federal Open Market Committee (FOMC) participants.Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
Federal funds rate expectationsMarket expectations for the fed funds rate
FOMC June 2020 forecast
Percent
2020 2021 2022Long
run
Change in real GDP, 4Q to 4Q -6.5 5.0 3.5 1.8
Unemployment rate, 4Q 9.3 6.5 5.5 4.1
PCE inflation, 4Q to 4Q 0.8 1.6 1.7 2.0
Federal funds rate
FOMC long-run projection
FOMC year-end estimates
Market expectations on 30/06/20
Long
run
9
Global and Asia equity market returns | 31GTM - Asia
31
Source: FactSet, MSCI, Standard & Poor’s, J.P. Morgan Asset Management.Returns are total returns based on MSCI indices, except the U.S., which is the S&P 500, and China A, which is the CSI 300 index in U.S. dollar terms. China return is based on the MSCI China index. 10-yr total (gross) return data is used to calculate annualized returns (Ann. Ret.) and annualized volatility (Ann. Vol.) and reflect the period 30/06/10 – 30/06/20. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2Q '20 YTD '20 Ann. Ret. Ann. Vol.
ASEAN U.S. India U.S . China A Ja pa n Ta iwa n China U.S . Ta iwa n Ta iwa n China U.S . China A
3 2 .4 % 2 .1% 2 6 .0 % 3 2 .4 % 5 2 .1% 9 .9 % 19 .6 % 5 4 .3 % - 4 .4 % 3 7 .7 % 2 1.5 % 3 .6 % 14 .0 % 2 4 .3 %
Kore a ASEAN China Ja pa n India China A U.S . Kore a India China A India China A Ta iwa n India
2 7 .2 % - 6 .1% 2 3 .1% 2 7 .3 % 2 3 .9 % 2 .4 % 12 .0 % 4 7 .8 % - 7 .3 % 3 7 .2 % 2 0 .6 % 1.2 % 10 .5 % 2 3 .2 %
Ta iwa n Europe ASEAN Europe U.S . U.S . Kore a India Ta iwa n U.S . U.S . Ta iwa n China A China
2 2 .7 % - 10 .5 % 2 2 .8 % 2 6 .0 % 13 .7 % 1.4 % 9 .2 % 3 8 .8 % - 8 .2 % 3 1.5 % 2 0 .5 % - 1.6 % 6 .7 % 2 0 .4 %
India Kore aAPAC
e x- JPTa iwa n Ta iwa n Europe
APAC
e x- JP
APAC
e x- JPASEAN Europe Kore a U.S . China Kore a
2 0 .9 % - 11.8 % 2 2 .6 % 9 .8 % 10 .1% - 2 .3 % 7 .1% 3 7 .3 % - 8 .4 % 2 4 .6 % 19 .6 % - 3 .1% 6 .6 % 2 0 .4 %
APAC
e x- JPJa pa n Kore a Kore a China India ASEAN China A Ja pa n China
APAC
e x- JP
APAC
e x- JPJa pa n Ta iwa n
18 .4 % - 14 .2 % 2 1.5 % 4 .2 % 8 .3 % - 6 .1% 6 .2 % 3 2 .6 % - 12 .6 % 2 3 .7 % 18 .5 % - 6 .0 % 6 .4 % 17 .2 %
Ja pa nAPAC
e x- JPEurope China ASEAN Kore a Ja pa n ASEAN
APAC
e x- JPJa pa n ASEAN Ja pa n Europe
APAC
e x- JP
15 .6 % - 15 .4 % 19 .9 % 4 .0 % 6 .4 % - 6 .3 % 2 .7 % 3 0 .1% - 13 .7 % 2 0 .1% 17 .0 % - 6 .9 % 6 .3 % 17 .0 %
U.S . China Ta iwa nAPAC
e x- JP
APAC
e x- JPChina China Ta iwa n Europe
APAC
e x- JPEurope Kore a
APAC
e x- JPEurope
15 .1% - 18 .2 % 17 .7 % 3 .7 % 3 .1% - 7 .6 % 1.1% 2 8 .5 % - 14 .3 % 19 .5 % 15 .6 % - 7 .2 % 6 .2 % 16 .7 %
China Ta iwa n U.S . China A Ja pa nAPAC
e x- JPEurope Europe China Kore a China Europe Kore a ASEAN
4 .8 % - 2 0 .2 % 16 .0 % - 2 .6 % - 3 .7 % - 9 .1% 0 .2 % 2 6 .2 % - 18 .7 % 13 .1% 15 .4 % - 12 .4 % 5 .2 % 16 .3 %
Europe China A China A India Europe Ta iwa n India Ja pa n Kore a ASEAN China A India ASEAN U.S .
4 .5 % - 2 0 .5 % 10 .9 % - 3 .8 % - 5 .7 % - 11.0 % - 1.4 % 2 4 .4 % - 2 0 .5 % 8 .8 % 14 .5 % - 16 .9 % 3 .0 % 13 .4 %
China A India Ja pa n ASEAN Kore a ASEAN China A U.S . China A India Ja pa n ASEAN India Ja pa n
- 8 .4 % - 3 7 .2 % 8 .4 % - 4 .5 % - 10 .7 % - 18 .4 % - 15 .2 % 2 1.8 % - 2 7 .6 % 7 .6 % 11.6 % - 18 .6 % 1.7 % 13 .4 %
10-yrs ('10 - '20)
10
Global equities: Earnings expectations | 33GTM - Asia
33
-80%
-60%
-40%
-20%
0%
20%
40%
60%
'14 '15 '16 '17 '18 '19 '20
24%
8%
5%6%
1%
-4%-3%
-2%
-22%
-1% -2%
-26%
29%
23%
21%
30%
-30%
-20%
-10%
0%
10%
20%
30%
40%
U.S. EM Asia Pacific ex-Japan
Europe
Earnings growthEarnings per share, year-over-year change, consensus estimates
Source: IBES, MSCI, Standard & Poor’s, Thomson Reuters Datastream, J.P. Morgan Asset Management. Asia Pacific ex-Japan, emerging markets (EM), Europe and U.S. equity indices used are the MSCI Asia Pacific ex-Japan, MSCI Emerging Markets, MSCI Europe and S&P 500, respectively. Consensus estimates used are calendar year estimates from IBES. Revisions are based on the current unreported year. Net earnings revisions is (number of companies with upward earnings revisions – number of companies with downward earnings revisions) / number of total companies. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
Earnings revisions ratiosNet earnings revisions to consensus estimates, 13-week moving average
U.S.
Europe
Asia Pacific
ex-Japan
Japan
2018 20202019 2021
11
United States: Sector earnings and valuations | 41GTM - Asia
41
-150%
-100%
-50%
0%
50%
100%
150%
0x
10x
20x
30x
40x
50x
60x
S&P 500 earnings growth estimatesYear-over-year change
Source: FactSet, Standard & Poor’s, J.P. Morgan Asset Management; (Left) Compustat. *Energy sector earnings are expected to increase by 1,035% in 2021. **The forward price-to-earnings ratio in the energy sector at 30 June 2020 was -141x. The energy sector reached a historic maximum of 1,529x and a historic minimum of 949x. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
S&P 500 price-to-earningsForward price-to-earnings ratio
15-year range
Current
15-year average2021
2020
12
Global fixed income: Yields and returns
43
Source: Barclays, Bloomberg Finance L.P., FactSet, J.P. Morgan Economic Research, J.P. Morgan Asset Management. Based on Bloomberg Barclays U.S. Aggregate Credit – Corporate High Yield Index (U.S. HY), Bloomberg Barclays U.S. Aggregate Credit – Corporate Investment Grade Index (U.S. IG), J.P. Morgan Government Bond Index – EM Global (GBI-EM) (Local EMD), J.P. Morgan Emerging Market Bond Index Global (EMBIG) (USD EMD), J.P. Morgan Asia Credit Index (JACI) (USD Asian Bond), Bloomberg Barclays Pan European High Yield (Europe HY), J.P. Morgan Government Bond Index – Global Traded (DM Government Bond), J.P. Morgan Asia Credit High Yield Index (Asia HY), Bloomberg Barclays Global U.S. Treasury –Bills (3-5 years) (U.S. Treasury) and Bloomberg Barclays U.S. Treasury – Bills (1-3 months) (Cash). 5-year data is used to calculate annualized returns (Ann. Ret.). Returns are in U.S. dollars and reflect the period from 30/06/15 – 30/06/20. *Duration is a measure of the sensitivity of the price (the value of the principal) of a fixed income investment to a change in interest rates and is expressed as number of years. Rising interest rates mean falling bond prices, while declining interest rates mean rising bond prices. **Correlation to the MSCI AC World Index is a measure over 10 years of data. Positive yield does not imply positive return. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
Global bond opportunities Fixed income sector returns
5-yrs
2014 2015 2016 2017 2018 2019 2Q '20 YTD '20 Ann. Ret.
USD
Asia nAsia HY U.S . HY
Europe
HYCa sh U.S . IG
Europe
HY
U.S .
Tre a sU.S . IG
8 .3 % 5 .2 % 17 .1% 2 1.0 % 1.8 % 14 .5 % 13 .5 % 8 .2 % 5 .8 %
U.S . IGUSD
Asia n
Loc a l
EMD
Loc a l
EMD
U.S .
Tre a s
USD
EMDAsia HY
DM
Gov't
USD
EMD
7 .5 % 2 .8 % 11.4 % 15 .4 % 0 .9 % 14 .4 % 11.8 % 3 .1% 5 .1%
Asia HYUSD
EMDAsia HY
USD
EMD
DM
Gov'tU.S . HY
USD
EMDCa sh Asia HY
6 .1% 1.2 % 11.2 % 9 .3 % - 0 .7 % 14 .3 % 11.2 % 0 .5 % 5 .1%
USD
EMD
U.S.
Tre a s
USD
EMDU.S. HY
USD
Asia n
Loc a l
EMDU.S . HY
USD
Asia n
USD
Asia n
5 .5 % 0 .8 % 10 .2 % 7 .5 % - 0 .8 % 13 .1% 10 .2 % - 3 .6 % 5 .0 %
U.S .
Tre a sCa sh U.S . IG Asia HY U.S . HY Asia HY U.S . IG U.S . IG U.S . HY
5 .1% 0 .0 % 6 .1% 6 .9 % - 2 .1% 12 .8 % 9 .0 % - 3 .6 % 4 .8 %
U.S . HY U.S . IGUSD
Asia n
DM
Gov'tU.S . IG
USD
Asia n
Loc a l
EMD
USD
EMD
U.S.
Tre a s
2 .5 % - 0 .7 % 5 .8 % 6 .8 % - 2 .5 % 11.3 % 7 .0 % - 11.8 % 4 .1%
DM
Gov't
DM
Gov't
Europe
HYU.S . IG Asia HY
Europe
HY
USD
Asia nAsia HY
DM
Gov't
0 .7 % - 2 .6 % 3 .4 % 6 .4 % - 3 .2 % 10 .3 % 6 .1% - 12 .0 % 3 .8 %
Ca sh U.S . HYDM
Gov't
USD
Asia n
USD
EMD
U.S.
Tre a s
DM
Gov'tU.S . HY
Europe
HY
0 .0 % - 4 .5 % 1.6 % 5 .8 % - 4 .6 % 6 .9 % 1.5 % - 12 .7 % 2 .9 %
Europe
HY
Europe
HY
U.S .
Tre a s
U.S .
Tre a s
Loc a l
EMD
DM
Gov't
U.S .
Tre a s
Loc a l
EMD
Loc a l
EMD
- 6 .0 % - 7 .6 % 1.0 % 2 .3 % - 6 .7 % 6 .0 % 0 .5 % - 16 .1% 1.2 %
Loc a l
EMD
Loc a l
EMDCa sh Ca sh
Europe
HYCa sh Ca sh
Europe
HYCa sh
- 6 .1% - 18 .0 % 0 .3 % 0 .8 % - 8 .2 % 2 .2 % 0 .0 % - 17 .0 % 1.1%
Sector YTMDuration*
(years)
Correl. to
MSCI AC
World**
Correl. to
10-year
UST
Asia HY 7.9% 4.3 0.70 -0.08
U.S. HY 7.0% 3.9 0.83 -0.24
USD EMD 5.1% 7.9 0.62 0.11
Europe HY 5.0% 3.7 0.82 -0.32
Local EMD 4.7% 5.1 0.67 -0.09
USD Asian 4.1% 5.6 0.56 0.24
U.S. IG 2.2% 8.5 0.38 0.47
DM Gov't 0.6% 8.8 0.14 0.58
U.S. Treasury 0.5% 7.2 -0.43 0.98
Cash 0.1% 0.2 -0.12 0.13
| 43GTM - Asia
13
Global fixed income: Valuations | 45GTM - Asia
45
Source: iBoxx, ICE BofA Merrill Lynch, J.P. Morgan Economics Research, J.P. Morgan Asset Management.Based on J.P. Morgan Domestic High Yield Index (U.S. high yield), J.P. Morgan U.S. Liquid Index (JULI) (U.S. investment grade), J.P. Morgan Euro High Yield Index (Euro high yield), iBoxx EUR corporates (Euro investment grade), J.P. Morgan Asia Credit Index (JACI) (USD Asia credit), J.P. Morgan Asia Credit China Index (USD China offshore credit), J.P. Morgan Asia Credit High Yield Index (USD Asia high yield), J.P. Morgan EMBI Global (EMD USD), J.P. Morgan Corporate Emerging Markets Bond Index – CEMBI (USD EMD corporates), J.P. Morgan GBI-EM Global (Local EMD). Positive yield does not imply positive return. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
Spread to worst across fixed income sub-sectorsBasis points, last 10 years
10-yr. average
Latest
10-yr. range
YTD minimum
YTD maximum
542
166
511
111
237
325
467
355331
473
722
191
611
126
299 299
768
432
382422409
125
349
67
179 193
478
275
221
350
1139
387
1045
211
432 437
1130
662
606561
0
200
400
600
800
1,000
1,200
U.S. highyield
U.S.investment
grade
Euro highyield
Euroinvestment
grade
USDAsiacredit
USD Chinaoffshore credit
USD Asiahigh yield
USD EMD USD EMDcorporates
Local EMD
14
U.S. high yield bonds | 53GTM - Asia
53
0
400
800
1,200
1,600
2,000
0%
4%
8%
12%
16%
20%
'90 '95 '00 '05 '10 '15 '20
10.8% 10.3%
7.1% 7.0% 6.7% 6.6%5.1% 5.0% 4.6% 4.5% 4.3% 3.8% 3.6% 3.3% 3.1% 3.0% 2.9% 2.6% 2.6% 1.7% 1.3%0.0%
9.5%
0.6% 0.8% 0.2% 0.0% 0.0% 0.0% 0.0%1.3%
20.1%
2.8%0.0% 0.0% 0.0%
11.0%
1.1% 0.0% 0.0%
7.9%
0.0%0%
5%
10%
15%
20%
25%
Source: J.P. Morgan Economics Research, J.P. Morgan Asset Management. *Default rate is defined as the percentage of the total market trading at or below 50% of par value and includes any Chapter 11 filing, pre-packaged filing or missed interest payments. Spreads indicated are benchmark yield-to-worst less comparable maturity Treasury yields. **Data reflects 20-year average and is as of 30/06/20. U.S. corporate high yield is represented by the J.P. Morgan Domestic High Yield Index.Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
Last 12 months sector default ratesSectors with highest index weights
High yield spread and default rate*
Default rate Spread to worst (basis points)
10-yr average Latest
HY spread to worst 543bps 722bps
HY energy spread to worst 658bps 1203bps
HY default rate 2.0% 6.2%
HY ex-energy default rate 3.0%** 3.9%
Recessions
Default rate
Index weight
15
Asset class returns | 56GTM - Asia
56
Source: Bloomberg Finance L.P., Dow Jones, FactSet, J.P. Morgan Economic Research, MSCI, J.P. Morgan Asset Management. The “Diversified” portfolio assumes the following weights: 20% in the MSCI World Index (DM Equities), 20% in the MSCI AC Asia Pacific ex-Japan (APAC ex-JP), 5% in the average of the MSCI EM Latin America and MSCI EM EMEA Indices (EM ex-Asia), 10% in the J.P. Morgan EMBIG Index (EMD), 10% in the Bloomberg Barclays Aggregate (Global Bonds), 10% in the Bloomberg Barclays Global Corporate High Yield Index (Global Corporate High Yield), 15% in J.P. Morgan Asia Credit Index (Asian Bonds), 5% in Bloomberg Barclays U.S. Aggregate Credit – Corporate Investment Grade Index (U.S. IG) and 5% in Bloomberg Barclays U.S. Treasury –Bills (1-3 months) (Cash). Diversified portfolio assumes annual rebalancing. All data represent total return in U.S. dollar terms for the stated period. 10-year total return data is used to calculate annualized returns (Ann. Ret.) and 10-year price return data is used to calculate annualized volatility (Ann. Vol.) and reflects the period 30/06/10 – 30/06/20. Please see disclosure page at end for index definitions. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2Q '20 YTD '20 Ann. Ret. Ann. Vol.
APAC
e x- JPEMD
APAC
e x- JP
DM
Equitie s
Asia n
Bonds
Asia n
Bonds
EM e x-
Asia
APAC
e x- JPCa sh
DM
Equitie s
DM
Equitie sU.S . IG
DM
Equitie s
EM e x-
Asia
18 .4 % 8 .5 % 2 2 .6 % 2 7 .4 % 8 .3 % 2 .8 % 2 7 .1% 3 7 .3 % 1.8 % 2 8 .4 % 19 .5 % 5 .0 % 10 .6 % 2 3 .1%
EM e x-
AsiaU.S . IG
Globa l
Corp HY
Globa l
Corp HYU.S . IG EMD
Globa l
Corp HY
DM
Equitie s
Asia n
Bonds
APAC
e x- JP
APAC
e x- JP
Globa l
Bonds
Globa l
Corp HY
APAC
e x- JP
16 .6 % 8 .1% 18 .9 % 8 .4 % 7 .5 % 1.2 % 14 .0 % 2 3 .1% - 0 .8 % 19 .5 % 18 .5 % 3 .0 % 6 .4 % 17 .0 %
Globa l
Corp HY
Globa l
BondsEMD Dive rsifie d EMD Ca sh EMD
EM e x-
Asia
Globa l
Bonds
EM e x-
Asia
EM e x-
Asia
Asia n
BondsDive rsifie d
DM
Equitie s
13 .8 % 5 .6 % 18 .5 % 5 .4 % 5 .5 % 0 .0 % 10 .2 % 2 0 .3 % - 1.2 % 18 .9 % 17 .6 % 2 .3 % 6 .3 % 13 .8 %
DM
Equitie s
Asia n
Bonds
EM e x-
Asia
APAC
e x- JP
DM
Equitie s
DM
Equitie sDive rsifie d Dive rsifie d U.S . IG Dive rsifie d Dive rsifie d Ca sh
APAC
e x- JPDive rsifie d
12 .3 % 4 .1% 17 .0 % 3 .7 % 5 .5 % - 0 .3 % 8 .2 % 17 .0 % - 2 .5 % 16 .5 % 12 .4 % 0 .5 % 6 .2 % 9 .1%
Dive rsifie dGloba l
Corp HY
DM
Equitie sCa sh
APAC
e x- JPU.S . IG
DM
Equitie s
Globa l
Corp HY
Globa l
Corp HYU.S . IG
Globa l
Corp HYEMD EMD
Globa l
Corp HY
12 .2 % 2 .6 % 16 .5 % 0 .0 % 3 .1% - 0 .7 % 8 .2 % 10 .3 % - 3 .5 % 14 .5 % 11.4 % - 1.9 % 5 .8 % 7 .9 %
EMD Ca sh Dive rsifie dAsia n
BondsDive rsifie d
Globa l
Bonds
APAC
e x- JPEMD EMD EMD EMD Dive rsifie d
Asia n
BondsEMD
12 .0 % 0 .1% 15 .5 % - 1.4 % 3 .0 % - 3 .2 % 7 .1% 9 .3 % - 4 .6 % 14 .4 % 11.2 % - 3 .3 % 5 .7 % 7 .8 %
Asia n
BondsDive rsifie d
Asia n
BondsU.S . IG
Globa l
BondsDive rsifie d U.S . IG
Globa l
BondsDive rsifie d
Globa l
Corp HYU.S . IG
Globa l
Corp HYU.S . IG U.S . IG
10 .6 % - 2 .4 % 14 .3 % - 1.5 % 0 .6 % - 3 .3 % 6 .1% 7 .4 % - 5 .8 % 13 .4 % 9 .0 % - 3 .8 % 5 .5 % 5 .0 %
U.S . IGDM
Equitie sU.S . IG
Globa l
Bonds
Globa l
Corp HY
Globa l
Corp HY
Asia n
BondsU.S . IG
EM e x-
Asia
Asia n
Bonds
Asia n
Bonds
DM
Equitie s
Globa l
Bonds
Globa l
Bonds
9 .0 % - 5 .0 % 9 .8 % - 2 .6 % 0 .2 % - 4 .9 % 5 .8 % 6 .4 % - 6 .8 % 11.3 % 6 .1% - 5 .5 % 2 .8 % 4 .7 %
Globa l
Bonds
APAC
e x- JP
Globa l
BondsEMD Ca sh
APAC
e x- JP
Globa l
Bonds
Asia n
Bonds
DM
Equitie s
Globa l
Bonds
Globa l
Bonds
APAC
e x- JPCa sh
Asia n
Bonds
5 .5 % - 15 .4 % 4 .3 % - 6 .6 % 0 .0 % - 9 .1% 2 .1% 5 .8 % - 8 .2 % 6 .8 % 3 .3 % - 6 .0 % 0 .6 % 4 .7 %
Ca shEM e x-
AsiaCa sh
EM e x-
Asia
EM e x-
Asia
EM e x-
AsiaCa sh Ca sh
APAC
e x- JPCa sh Ca sh
EM e x-
Asia
EM e x-
AsiaCa sh
0 .1% - 2 1.2 % 0 .1% - 8 .5 % - 2 0 .2 % - 2 2 .7 % 0 .3 % 0 .8 % - 13 .7 % 2 .2 % 0 .0 % - 2 7 .5 % - 2 .0 % 0 .2 %
10-yrs ('10 - '20)
16
U.S. dollar | 59GTM - Asia
59
60
70
80
90
100
110
120
130
140
'86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20
Source: Bloomberg Finance L.P., FactSet, U.S. Federal Reserve, J.P. Morgan Asset Management.*The real broad trade-weighted exchange rate index is the weighted average of a market’s currency relative to a basket of trading partners’ currencies adjusted for the effects of inflation. The weights are determined by comparing the relative trade balances, in terms of one market’s currency, with other markets within the basket. **The U.S. dollar index shown here is a nominal trade-weighted index of major trading partners’ currencies. Major currencies are: British pound, Canadian dollar, euro, Japanese yen, Swedish kroner and Swiss franc. Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
U.S. dollar performanceIndex, Jan. 2006 =100
U.S. dollar index**
Real trade-weighted exchange rate index (REER)*
6/2020: 109.486/2020: 109.83
Recession periods
17
Commodities | 62GTM - Asia
62
-4 -2 0 2 4
Commodity Index
Natural Gas
Agriculture
Oil
Industrial Metals
Precious Metals
Gold
Example
Source: Bloomberg Finance L.P., FactSet, J.P. Morgan Asset Management; (Left) CME; (Right) Barclays, J.P. Morgan Economic Research, MSCI. Commodities are represented by the appropriate Bloomberg Commodity sub-index priced in U.S. dollars. Crude oil shown is West Texas Intermediate (WTI) crude. Other commodity prices are represented by futures contracts. Z-scores are calculated using daily prices over the past five years. Based on Bloomberg Commodity Index (Comdty.); MSCI ACWI Select – Energy Producers IMI, Metals & Mining Producers ex Gold & Silver IMI, Gold Miners IMI, Agriculture Producers IMI (Energy (E), M&M (E), Gold (E), Agri. (E)); Bloomberg Barclays Global Aggregate Credit – Corporate Energy Index (Energy (FI)); Bloomberg Barclays U.S. Aggregate Credit – Corporate High Yield Metals & Mining Index (U.S. M&M (FI)); Bloomberg Barclays Euro Aggregate Credit – Corporate Metals & Mining Index (Euro M&M (FI)); J.P. Morgan Emerging Market Corporate Credit – Corporate Metals & Mining Index (EM M&M (FI)).5-year total return data is used to calculate annualized returns (Ann. Ret.) and 5-year price return data is used to calculate annualized volatility (Ann. Vol.) and reflects the period 30/06/15 – 30/06/20. Past performance is not a reliable indicator of current and future results. Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
Commodity pricesCommodity price z-scores for the past five years, USD per unit
Returns
High level
Current
Low level
$35
$1.6
$1,801
$39
$34 $64
$4.8
$1,801
$76$12
$1,050
$1.6
$144$84
$105
$212$144
$212
$103$59
$65
2015 2016 2017 2018 2019 2Q '20 Ann. Ret. Ann. Vol.
Ene rgy
(FI)Gold (E) M&M (E)
Euro M&M
(FI)Gold (E) Gold (E) Gold (E) Gold (E)
- 7 .3 % 6 2 .9 % 3 7 .5 % - 0 .9 % 5 1.1% 5 4 .7 % 17 .5 % 3 7 .1%
EM M&M
(FI)M&M (E) Agri. (E)
US M&M
(FI)M&M (E) M&M (E)
EM M&M
(FI)M&M (E)
- 10 .9 % 5 7 .8 % 2 0 .3 % - 3 .5 % 17 .1% 2 8 .8 % 7 .1% 2 9 .0 %
Agri. (E)US M&M
(FI)
EM M&M
(FI)
Ene rgy
(FI)
EM M&M
(FI)Ene rgy (E)
US M&M
(FI)Ene rgy (E)
- 13 .7 % 4 5 .5 % 14 .7 % - 3 .7 % 16 .5 % 18 .6 % 5 .7 % 2 2 .7 %
Euro M&M
(FI)
EM M&M
(FI)
US M&M
(FI)
EM M&M
(FI)
US M&M
(FI)
EM M&M
(FI)
Ene rgy
(FI)Agri. (E)
- 16 .1% 3 2 .4 % 9 .9 % - 4 .1% 14 .0 % 18 .3 % 3 .9 % 14 .3 %
Ene rgy (E) Ene rgy (E) Gold (E) Agri. (E) Agri. (E)Ene rgy
(FI)M&M (E) Comdty.
- 2 0 .6 % 2 9 .2 % 9 .4 % - 8 .9 % 13 .8 % 16 .4 % 2 .5 % 12 .8 %
US M&M
(FI)
Euro M&M
(FI)Ene rgy (E) Comdty.
Ene rgy
(FI)Agri. (E)
Euro M&M
(FI)
EM M&M
(FI)
- 2 3 .7 % 2 1.9 % 9 .1% - 11.2 % 13 .4 % 13 .9 % 2 .0 % 12 .8 %
Comdty. Agri. (E)Ene rgy
(FI)Ene rgy (E) Ene rgy (E)
US M&M
(FI)Agri. (E)
US M&M
(FI)
- 2 4 .7 % 15 .7 % 9 .0 % - 11.4 % 9 .5 % 8 .4 % 0 .9 % 11.0 %
Gold (E) Comdty.Euro M&M
(FI)Gold (E) Comdty.
Euro M&M
(FI)Ene rgy (E)
Ene rgy
(FI)
- 2 6 .3 % 11.8 % 3 .9 % - 13 .0 % 7 .7 % 8 .3 % - 5 .9 % 10 .6 %
M&M (E)Ene rgy
(FI)Comdty. M&M (E)
Euro M&M
(FI)Comdty. Comdty.
Euro M&M
(FI)
- 4 0 .1% 11.1% 1.7 % - 17 .8 % 5 .2 % 5 .1% - 7 .7 % 8 .6 %
2015 - 2020
18
Gold | 63GTM - Asia
63
Source: FactSet, U.S. Federal Reserve, J.P. Morgan Asset Management.
Past performance is not a reliable indicator of current and future results.Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
Gold and real rates USD / Troy oz U.S. 10-year Treasury inflation-protected security
Gold price TIPS yield (inverted)
19
Oil: Short-term market dynamics | 64GTM - Asia
64
75
80
85
90
95
100
105
Jan '18 Jul '18 Jan '19 Jul '19 Jan '20 Jul '20 Jan '21 Jul '21
12/2008: $34.27
Global oil supply and demandMillion barrels per day
Source: FactSet, J.P. Morgan Asset Management; (Left) Federal Reserve Bank of Dallas; (Top right) U.S. Energy Information Administration.*Oil costs are 2015 data, except for the U.S. which is as of June 2020.Guide to the Markets – Asia. Data reflect most recently available as of 30/06/20.
Cost of oil production by countryUSD / bbl, 2015*
Price of oilBrent crude, USD / bbl
06/2020: $41.3
07/2008: $145.6506/2014: $115.06
Forecast
Demand
Supply
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
$50
$55
$60
U.S
. -
Pe
rmia
n (
Oth
er)
U.S
. -
SC
OO
P/S
TA
CK
UK
U.S
. -
Ea
gle
Fo
rd
U.S
. -
Pe
rmia
n (
DE
)
Oth
er
U.S
. shale
Oth
er
U.S
. (n
on-s
hale
)
Bra
zil
U.S
. -
Pe
rmia
n (
Mid
land)
Canada
Norw
ay
An
gola
Colu
mb
ia
Nig
eria
Chin
a
Me
xic
o
Ka
zakhsta
n
Lib
ya
Ve
nezuela
Alg
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Russia
Iran
UA
E
Iraq
Sa
udi A
rabia
Ku
wait
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