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Weekly Market Report

07 Jul 2020

06 July 2020

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The Market Last Week

Global equities ended mostly higher last week, amid progress in the development of a potential Covid-19 vaccine and following a series of upbeat US economic data.


UK Markets ended the week in negative territory, after Britain’s economy registered its worst quarterly contraction since 1979.

UK’s gross domestic product (GDP) dropped on a quarterly basis in 1Q20, recording its worst decline since 1979.

Current account deficit widened more-than-anticipated in 1Q20.

In the UK, net consumer credit fell more than market expectations in May.

Britain’s mortgage approvals for house purchases unexpectedly fell in May, recording its lowest level since comparable records began in October 1997.

UK’s final Markit manufacturing expanded in June.

The Nationwide house price index fell in June, recording its first annual decline since 2012.

The GfK consumer confidence index improved in June.

UK’s Markit services PMI rose to a four-month high level in June.




European Markets ended the week on a positive footing, as robust economic data renewed hopes for a swift economic recovery.

Eurozone’s inflation accelerated in June.

In the Eurozone, the economic sentiment indicator rose less than market anticipations in June.

Eurozone’s services sentiment indicator advanced less than market forecast in June.

In the Eurozone, the business climate indicator unexpectedly climbed in June.

Eurozone’s final consumer confidence index rebounded in line with market consensus in June.

In the Eurozone, the final Markit services PMI advanced in June, hitting its highest level in 4-months.

Eurozone’s final Markit manufacturing PMI rose in June.

In the Eurozone, the unemployment rate advanced less-than-anticipated in May.

Eurozone’s producer price index (PPI) fell in May.

In Germany, the final Markit manufacturing PMI advanced in June.

Germany’s retail sales advanced more-than-expected in May.

In Germany, seasonally adjusted unemployment rate advanced less-than-anticipated in June.

Germany’s final Markit services PMI advanced in June.

In Germany, the consumer price index (CPI) advanced more than market consensus in June.

European Central Bank (ECB) President, Christine Lagarde, in her speech, indicated that downward pressure on prices will persist over the next two years, but could see a turnaround due to the coronavirus pandemic-driven economic transformation. She further added that the pandemic would boost the pre-existing shift toward greater digitisation and automation, shorter supply chains, and greener industries.




US Markets ended the week in green, amid better-than-expected US economic data and expectations for a possible COVID-19 vaccine.

In the US, the CB consumer confidence index jumped in June.

The Chicago Fed PMI advanced less-than-expected in June.

US Dallas Fed manufacturing business index rebounded in June.

Pending home sales jumped on a monthly basis in May.

US ISM manufacturing index climbed more than market forecast in June.

The final Markit manufacturing PMI advanced in June.

The MBA mortgage applications dropped on a weekly basis in the week ended 26 June 2020.

Construction spending unexpectedly dropped on a monthly basis in May.

US private sector employment increased less than market consensus in June.

Non-farm payrolls jumped more than market forecast in June.

US unemployment rate dropped in June.

Durable goods orders rebounded on a monthly basis in May.

US factory orders advanced less-than-expected on a monthly basis in May.

Average hourly earnings of all employees declined on a monthly basis in June.

US initial jobless claims fell less than market expectations on a weekly basis in the week ended 26 June 2020.

Trade deficit widened more than market consensus in May.

Federal Reserve Chairman, Jerome Powell, in his testimony before the House Financial Services Committee, painted a mixed picture of the US economic recovery and warned that failure to contain the spread of COVID-19 would result in an economic fallout. On the contrary, he pointed to better-than-expected May employment numbers and retail sales figures to make the case that the economic recovery was underway. Meanwhile, Powell reiterated his commitment to keep interest rates low and provide various liquidity facilities.




Asian Markets ended mostly firmer last week, as encouraging economic data raised prospects for a smooth economic recovery.

Australia’s AiG performance of manufacturing index climbed in June.

In Australia, the Commonwealth Bank manufacturing PMI advanced more than market expectations in June.

Australia’s building permits declined in May.

In Australia, private sector credit demand unexpectedly fell on a monthly basis in May.

Australia’s trade surplus unexpectedly narrowed in May.

In Australia, the AiG performance of construction index advanced in June.

Australia’s seasonally adjusted retail sales jumped in May.

In Australia, the Commonwealth Bank services PMI fell in June.

China’s Caixin manufacturing PMI unexpectedly advanced to a six-month high level in June.

In China, the non-manufacturing PMI expanded in June.

China’s NBS manufacturing PMI unexpectedly advanced in June.

In China, the Caixin services PMI unexpectedly rose in June, recording its highest reading since April 2010.

In Japan, housing starts dropped on an annual basis in May.

Japan’s construction orders declined construction orders declined in May.

In Japan, the Jibun Bank manufacturing PMI advanced more than market forecast in June.

Japan’s unemployment rate advanced more-than-anticipated in May.

In Japan, industrial production fell more than market consensus in May.

Japan’s consumer confidence index unexpectedly rose in June.

In Japan, the Jibun Bank services PMI jumped in June.




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Currency Update

The EUR ended firmer against the USD last week, after Eurozone’s consumer price index advanced in June.
The British Pound strengthened against the greenback last week, despite a drop in UK’s GDP in the first quarter of 2020.
The US Dollar ended weaker against its major counterparts last week, as robust US economic data boosted risk appetite among investors.


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FOMC expects loose monetary policy to last “for many years”

The Federal Open Market Committee (FOMC), in its June meeting minutes, indicated that it expects its loose monetary policy to last “for many years” until the economy poses a robust recovery. Moreover, Fed officials see the need for “highly accommodative monetary policy for some time” and discussed new tools for conducting monetary policy. Also, some officials called for guidance tied to inflation or unemployment goals. Lastly, members agreed that there remained an extraordinary amount of uncertainty and considerable risks to the economic outlook.


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The Week Ahead

Going ahead this week, investors will keep a tab on the US Markit services PMI, ISM non-manufacturing PMI, initial jobless claims and monthly budget statement for further direction. Additionally, Eurozone’s retail sales along with Germany’s industrial production and trade balance will keep investors on their toes. Also, UK’s Markit construction PMI, the Halifax house index, the RICS housing price balance and BRC like-for-like retail sales would garner significant amount of investor attention.


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