What mattered last week and a preview of the week ahead

Charts (5)


What mattered last week:

  • Strong economic data, vaccine hopes, and more talk of stimulus helped the S&P500 close higher for a third straight week.
  • Offsetting a continuing rise in Covid-19 cases in the U.S, Latin America, and in Australia.  
  • Despite stronger than expected Q2 GDP data, Chinese shares fell 4.4% after a strong run higher during the first two weeks of July.
  • The ECB left monetary policy unchanged ahead of a weekend summit to discuss the proposed EU recovery fund.  
  • Volatility, as measured by the VIX index, closed lower for a 5th straight week at 25.7.
  • U.S. 10-year yields closed marginally lower near 0.64%.
  • A sixth straight week of gains for gold as it closed near U.S $1810.
  • Crude oil closed mostly unchanged at U.S $40.75/bbl.
  • An impressive performance by the ASX200 to close almost 2% higher despite the lockdown in Victoria.
  • In FX, the AUDUSD closed higher for a 4th straight week near .7000c.

For the week ahead, the key events are:

A key focus for traders this week will again be on new Covid-19 cases predominantly in the U.S, Latin America, and in Australia.

Australia: RBA meeting minutes and RBA Governor Lowe speech (Tuesday), Treasurer’s economic and fiscal update (Thursday).

  • RBA Governor Lowe speech (Tuesday): The topic is “The Labour Market and Public sector Balance Sheets” and will be delivered at the Anika foundation lunch. It will be closely watched for clues and updated insights in the RBA’s thinking.
  • Treasurer’s economic and fiscal update (Thursday): The Treasurer will provide details on the next stage of policy support including an extension of fiscal support.

New Zealand: Global Dairy Auction (Tuesday), balance of trade (Friday).

China: Loan Prime rate (Monday).

Japan: BoJ meeting minutes and balance of trade (Monday), CPI (Tuesday), Jibun Bank PMI’s (Wednesday).

U.S: House price index, existing home sales (Wednesday), jobless claims (Thursday), Markit flash PMI’s, and new home sales (Friday).

June quarter earnings will continue this week with reports from companies including Amazon, Tesla, Microsoft, Intel, and Coca-Cola.

Canada: New housing price index and retail sales (Tuesday), CPI (Wednesday).

Euro Area: German PPI and EA current account (Monday), GFK consumer confidence (Thursday), EA consumer confidence, and Markit Flash PMI’s (Friday).

UK: Retail Sales and Markit flash PMI’s (Friday).

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