• The Fund’s USD I Class was down 0.27% in June
• Fed hiked rates by 25bps to 1%‐1.25%. Balance sheet unwind expected later this year
• US data continues to broadly disappoint; IMF revises US growth forecasts lower
• IMF upgrades China growth to 6.7%. China data remains stable
• MSCI Inc announces China A‐share inclusion in EM Index. ‘Bond Connect’ launches in July
A mixed month for asset classes saw market sentiment driven mostly by new‐found central bank hawkishness. The Fed hiked rates by 25bps to a still historically low range of 1%‐1.25%. The Fed also announced that caps will be applied to the reinvestment of maturing assets in the unwind of the balance sheet, and expectations are for a September announcement, with some members calling for a ‘glacial’ and ‘baby step’ approach. US data releases through last month were broadly disappointing, although the Fed said it is not going to let data ‘noise’ detract it from its course of normalisation, markets were still impacted. The yield on the 10‐year US Treasury, for example, fell to year lows after the weak retail sales and disappointing CPI readings were released for May. However, on the back of the more hawkish Fed rhetoric, and broader positive market sentiment towards global growth, although still subdued ‐ alongside lacklustre inflation ‐ the yield on the 10‐year UST bounced 10bps higher to 2.31%. The dollar (DXY Index) however remained on the back foot falling 1.34% over the month.