What mattered last week and a preview of the week ahead
Tony Sycamore May 18, 2020 10:00 AM
What mattered last week: The S&P500 and stock markets in general, fell as tensions between the U.S and China increased. Fed Chair Powell delivered a downbeat assessment of the U.S. economy and ruled out negative rates. Two influential hedge fund managers commented that stock markets were overvalued.
What mattered last week:
- The S&P500 and stock markets in general, fell as tensions between the U.S and China increased.
- Fed Chair Powell delivered a downbeat assessment of the U.S. economy and ruled out negative rates.
- Two influential hedge fund managers commented that stock markets were overvalued.
- Lockdown restrictions in the U.S, Europe, and Australia/New Zealand continued to be eased.
- Volatility, as measured by the VIX index, closed +3.9 points higher at 31.9.
- U.S. 10-year yields closed fractionally lower, near 0.65%.
- Gold resumed its uptrend, closing +2.36% higher, near $1742.50.
- Crude oil futures rallied strongly for a third consecutive week as demand increased and production fell, closing at $29.52/bbl.
- The ASX200 closed mostly unchanged near 5400, despite the price of iron ore rallying over 3% to close near $90/tonne.
- In FX, the AUDUSD fell for the first time in six weeks, closing near .6415.
For the week ahead, the key events are:
The main focus of traders this week will be on progress as countries continue to ease lockdown restrictions and reopen economies.
Australia: RBA meeting minutes (Tuesday), RBA Governor Lowe speech (Thursday).
- RBA meeting minutes (Tuesday): The minutes are expected to maintain a dovish tone and underscore the RBA’s willingness to support the recovery.
New Zealand: Retail sales Q1 (Friday).
China: Loan Prime Rate meeting (Wednesday).
Japan: Q1 GDP (Monday), Reuters Tankan index, machinery orders (Wednesday), Jibun flash PMI’s (Thursday), inflation (Friday).
U.S: Building permits, housing starts, (Tuesday), FOMC meeting minutes, Markit flash PMI’s, existing home sales (Thursday).
- FOMC meeting minutes (Thursday): The minutes will follow the dovish tone in Fed Chair Powell’s speech last week.
Fed speakers on the wires this week include Fed Chair Powell, Rosengren, Williams and Brainard.
Canada: CPI (Wednesday), retail sales (Friday).
- Retail sales (Friday): The expectation is for retail sales to plunge by 10.0% in March, the first month of COVID-19 impacted retail sales data.
Euro Area: EA and German ZEW business sentiment surveys, EA consumer confidence (Thursday), EA and German Markit flash business PMI’s (Friday).
- EA and German Markit flash business PMI’s (Friday): European countries began to ease lockdown restrictions in early May and this is likely to result in a bounce from the extreme low PMI readings of April.
UK: Employment (Tuesday), inflation (Wednesday), Markit flash business PMI’s (Thursday).
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