What mattered last week and a preview of the week ahead

Charts (5)

What mattered last week:

  • The S&P500 finished the week almost 5% higher and Eurozone shares gained over 9%.
  • Supported by better than expected economic data, including ISM and the U.S. employment report.
  • As well as more stimulus measures from countries including Australian and in Europe.
  • Despite the worst civil unrest and protests in the U.S. since the early ’90s.
  • Volatility, as measured by the VIX index, closed -3.0pts lower at 24.5, its lowest level since late February.
  • U.S. 10-year yields closed 24bp higher near 0.90% in response to the better data.
  • Gold closed the week almost $45.00 lower near $1685 as markets embraced “risk-on”.
  • Economic recovery and a tentative OPEC agreement sent crude oil futures higher for a sixth straight week, closing at U.S $39.55/bbl.
  • The ASX200 rose 4.20% to close near 6000, supported by the second week of strong gains by financial stocks and the energy sector as iron ore closed above $100 per tonne.
  • Despite a fall in Australian Q1 GDP, that signals Australia entered recession for the first time since the early ’90s
  • In FX, the AUDUSD rallied near 300 pips to close near .6970.

For the week ahead, the key events are:

Australia: NAB business confidence (Tuesday),  Westpac consumer confidence, home loans (Wednesday).

  • Business and Consumer confidence (Tuesday/Wednesday): Both business and consumer confidence is expected to improve in response to the start of the re-opening.

New Zealand: Westpac consumer confidence, business NZ PMI (Friday).

China: CPI (Wednesday), total social financing, new yuan loans, FDI (Friday)

Japan: Machinery orders, PPI (Wednesday), machine tool orders (Thursday), capacity utilization (Friday).

U.S: CPI (Wednesday), FOMC, PPI (Thursday).

  • FOMC (Thursday): The Fed is unlikely to make any changes to monetary policy. Fed Chair Powell has spoken frequently in recent weeks, providing updated thoughts on subjects ranging from support for the recovery to negative interest rates which leaves little more to add this time around.

Canada: Housing starts (Monday), capacity utilization (Friday).

Euro Area: German industrial production (Monday), German current account (Tuesday), EA industrial production (Friday).

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

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