What mattered last week and a preview of the week ahead
Tony Sycamore March 22, 2020 10:20 PM
What mattered last week: An extreme week of volatility as U.S. equity market fell ~15% as the spread of Covid-19 continued. The impact of Covid-19 via border shutdowns, social distancing measures as well as the obvious impact on health impact presents a huge challenge and likely to result in a recession in several countries. Central banks and governments responded by slashing interest rates, resuming/starting Quantitative Easing (QE) programs and boosting/announcing fiscal stimulus packages.
What mattered last week:
- An extreme week of volatility as U.S. equity market fell ~15% as the spread of Covid-19 continued.
- The impact of Covid-19 via border shutdowns, social distancing measures as well as the obvious impact on health impact presents a huge challenge and likely to result in a recession in several countries.
- Central banks and governments responded by slashing interest rates, resuming/starting Quantitative Easing (QE) programs and boosting/announcing fiscal stimulus packages.
- Yields in the U.S. 10-year bond fell back to near 0.84%, while gold closed ~$1500, after finding support near $1450.
- Crude oil futures fell to near U.S$20.00/bbl a level not seen since 2002, before a modest bounce into the end of the week.
- Locally, the ASX200 finished the week down another 13%, closing just above 4800.
- In FX, the AUDUSD closed almost -6% lower near .5800c but not before trading to a new cycle low at .5510.
For the week ahead, the key events are:
Australia: CBA business conditions PMI’s (Tuesday).
New Zealand: Balance of trade (Wednesday), ANZ Roy Morgan Consumer confidence (Friday).
China: Industrial profits (Friday).
Japan: Jibun bank business conditions PMI’s (Tuesday), BoJ Monetary Policy meeting minutes (Wednesday).
U.S: Markit business conditions PMI’s, new home sales (Tuesday), durable goods (Wednesday), jobless claims (Thursday), personal spending and income (Friday)
- Jobless claims (Thursday): A large rise in jobless claims is expected.
Canada: Nothing of note.
Euro Area: German and EA Markit flash PMI’s (Tuesday), GFK German consumer confidence (Thursday).
UK: Markit/CIPS business conditions PMI’s (Tuesday), inflation (Wednesday), retails sales and Bank of England meeting (Thursday).
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