Technology stocks led Wall Street’s bullish week, spurred by strong sales guidance from US multinational Applied Materials, a large maker of machines that produce computer chips. Interest spilled over into Taiwan’s stock market, which lists many chipmakers and electronic parts suppliers. The Taiex Index was up 3.4% through the week to May 23. Specialist funds that benefited include the $14 million LionGlobal Taiwan Fund, the $180 million Fidelity Taiwan and the $35 million Threadneedle (Lux) Global Technology fund. Each posted gains of around 5%.

Meanwhile, hawkish comments from Federal Reserve officials and April policy minutes swung the pendulum back in favour of a summer rate hike in the US. The ascendant dollar and firmer Treasury yields cut short the two-month rebound in emerging market currencies, stocks and bonds. Retreating between 1.7% and 2.1% for the week were the $3.3 billion Aviva Investors Emerging Markets Local Currency Bond, the $1.8 billion BGF Emerging Markets Local Currency Bond and the $37 million AB SICAV I Emerging Market Local Currency Debt funds.

Latin America, especially Brazil, led the decliners among equity funds. The $388 million HSBC GIF Brazil Equity fund lost 6.7%, the $202 million Parvest Equity Brazil fund, 4.8% and the $264 million JPM Brazil Equity fund, 4.5%. The broader $1.68 billion BGF Latin American fund also fell 4.7%. The $163 million Schroder AS Gold and Precious Metals fund retreated 2.4% as spot gold fell 4% over the week.

The dollar’s momentum also subdued upward pressure on the yen, bringing relief to the export-oriented portfolios of large-cap Japan funds. The $2.6 billion Eastspring Investment Japan Dynamic gained nearly 4% to mitigate a year-to-date loss of 18.3%. The domestic-oriented $411 million Schroder ISF Japanese Small Companies fund rose 3.6% as Japan’s GDP growth of 1.7% in the first quarter beat expectations.

Renewed confidence in the pound nudged up GBP money market and GBP-hedged bond funds such as the $6.2 billion Pimco GIS Global High Yield Bond and the $1.6 billion Pimco GIS Diversified Income fund. Brexit concerns eased further with opinion polls showing double-digit leads for the Remain camp as economics trumped immigration worries.

Looking ahead, markets are fixated on the changing flux of signals from the US and Japan. “Reports on US durable goods orders and the manufacturing and services PMI this week will shed light on the strength of a second-quarter growth pickup — and whether a June Fed rate increase is likely. Yet the Fed’s decision may hinge on external developments; its June 14 and 15 policy meeting comes just a week ahead of a key UK referendum on EU member ship. Elsewhere, Japan is expected to announce fiscal stimulus at the G7 Summit, and possibly a decision on whether to delay a consumption tax hike slated for next April,” notes Black- Rock’s weekly market commentary.

This article appeared in the Personal Wealth of Issue 730 (May 30) of The Edge Singapore.