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What mattered last week and a preview of the week ahead

What mattered last week:

  • The S&P500 rose on optimism that the worst of the economic data is now behind us.
  • As well as an apparent easing in U.S.- China tensions.
  • And a gradual re-opening of economies as new Covid-19 cases appears to have peaked and is falling in many developed countries.
  • Volatility, as measured by the VIX index, fell almost 25% to 28.0.
  • U.S. 10-year yields closed about 6bp higher near 0.69%.
  • Gold closed the week unchanged near $1700.
  • Crude oil futures rallied for a second consecutive week, closing at $24.74/bbl.
  • The ASX200 rose 2.77%, to close near 5400.
  • In FX, the AUDUSD rose for a 5th straight week to close near .6530.

For the week ahead, the key events are:

The main focus of traders this week will be on the number of new Covid-19 cases as countries ease lockdowns and reopen economies.

Australia: NAB business confidence, home loans (Tuesday), Westpac consumer confidence, wage price index (Wednesday), employment (Thursday).

  • Employment (Thursday): The market is looking for record 575,000 fall in employment with the unemployment rate rising to 8.3% from 5.2% in March.

New Zealand: RBNZ interest rate meeting (Wednesday), business NZ PMI (Friday).

  • RBNZ interest rate meeting (Tuesday): Interest rates are expected to remain on hold at 0.25%, however, the RBNZ is expected to double the size of its QE purchases from $30bn per month to $60bn per month.

China: CPI (Tuesday), M2 money supply, total social financing, new yuan loans (Thursday), NBS Press conference, fixed asset investment, industrial production, retail sales, employment (Friday).

Japan: Leading economic index (Tuesday), current account (Wednesday), PPI (Friday).

U.S: CPI (Tuesday), PPI (Wednesday), initial jobless claims (Thursday), retail sales, industrial production  (Friday), jolts job openings (Friday).

March quarter earnings continue with reports from companies including Under Armour, Cisco, Applied Materials, and Marriot International.

Canada: nothing of note.

Euro Area: EA Industrial production (Wednesday), German flash GDP Q1, and EA 2nd estimate GDP as well as EA employment (Friday).

UK: Balance of trade, GDP, industrial production (Wednesday).

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