A review of the week past and the week ahead

Charts (3)

What mattered last week:

  • The S&P500 gained 1.5%, shaking off the news that President Trump and First Lady Melania Trump had tested positive for coronavirus.
  • As well as a jobs report that suggests the pace of the economic recovery in the U.S. is slowing. 661k jobs were created in September, 200k less than expected.
  • The 4th U.S. stimulus package remains in limbo as Democrats and Republicans remain divided.
  • The possibility of a contested U.S. Presidential election remains a threat.
  • Volatility, as measured by the VIX index, closed firmer at 27.6.
  • U.S. 10-year yields closed lower near 0.69%.
  • Gold gained more than $37.00 closing near $1900.
  • Crude oil fell -7.95% to U.S $37.05/bbl as Libya’s production of oil resumed.
  • The ASX200 closed 2.90% lower at 5791.5, erasing the prior week’s gains.
  • In FX, the AUDUSD rose 1.87% to close near .7160, as the U.S. dollar softened.

For the week ahead, the key events are:

Australia: NAB business confidence (Monday), balance of trade, RBA interest rate meeting, Federal Budget (Tuesday), housing finance (Friday).

  • RBA interest rate meeting/Federal Budget (Tuesday): The RBA is expected to leave monetary policy unchanged on Tuesday to allow the Federal Government both the time and the space to promote its Federal Budget delivered later the same day. For a full review of both click here

New Zealand: NZIER business confidence and capacity utilization, global dairy trade auction (Tuesday).

China: Caixin service and composite PMI (Friday).

Japan: Current account (Thursday), household spending, and machine tool orders (Friday).

U.S: ISM non-manufacturing (Monday), balance of trade (Tuesday), FOMC meeting minutes, and jobless claims (Thursday).

Canada: Balance of trade (Tuesday), Ivey PMI (Wednesday), housing starts (Thursday), employment (Friday).

Euro Area: EA retail sales (Monday), German factory orders and construction (Tuesday), German industrial production (Wednesday), German balance of trade, and current account (Thursday).

UK: Construction (PMI), Halifax house price index (Wednesday), balance of trade (Friday).

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