Big Data Analytics Solutions | Financial Services in India |Decimal Point Analysis

Weekly Market Report

22 Jun 2020

22 June 2020

Image
Image
Image

The Market Last Week

Global equities ended firmer last week, on hopes of additional global stimulus and swift global economic recovery.


UK Markets ended the week in positive territory, amid weakness in the British Pound.

UK’s average earnings including bonus advanced less-than-anticipated on an annual basis in April.

The ILO unemployment rate remained unchanged in April.

The retail price index unexpectedly dropped on a monthly basis in May.

The non-seasonally adjusted output producer price index (PPI) fell more-than-expected in May.

UK’s consumer price inflation slowed to a 4-year low level in May.

Retail sales advanced at a faster than expected pace in May.

Public sector net borrowing deficit unexpectedly widened in May, recording its largest annual increase in debt as a percentage of GDP since records began in March 1993.




European Markets ended the week on a positive footing, amid optimism over global stimulus and economic recovery.

In the Eurozone, the ZEW economic sentiment index advanced in June.

Eurozone’s consumer price inflation slowed in May, recording its lowest level since June 2016.

In the Eurozone, seasonally adjusted construction output declined on a monthly basis in April.

Eurozone’s seasonally adjusted current account surplus unexpectedly narrowed in April, recording its lowest level since 2017.

Germany’s ZEW current situation index improved in June.

In Germany, the ZEW economic sentiment index rose more than market expectations in June.

Germany’s consumer price inflation slowed for a third straight month in May, marking its lowest level since 2016.

Germany’s PPI dropped more than market anticipations in May, registering its biggest drop since May 2016.




US Markets ended the week in green, after the US Federal Reserve (Fed) announced more measures to support the market.

US current account deficit narrowed less than market consensus 1Q20.

US advance retail sales jumped more than market forecast on a monthly basis in May.

The NAHB housing market index advanced in June.

Manufacturing production climbed on a monthly basis in May.

Industrial production advanced less than market forecast on a monthly basis in May.

Business inventories dropped in April.

US building permits advanced less-than-expected in May.

Housing starts rose less than market forecast on a monthly basis in May.

The MBA mortgage applications advanced on a weekly basis in the week ended 12 June 2020, recording its highest level since 2009.

US initial jobless claims dropped less-than-anticipated on a weekly basis in the week ended 12 June 2020.

The Philadelphia Fed manufacturing index rebounded in June.

US Fed Chairman, Jerome Powell, during his testimony before the Senate Committee on Banking, Housing, and Urban Affairs, maintained a cautious stance about the US economy. He stated that the levels of output and employment remain far below their pre-pandemic levels, and “significant uncertainty” remains about the timing and strength of the recovery.




Asian Markets ended firmer last week, on hopes for US-China trade progress.

The People’s Bank of China (PBoC), in its latest monetary policy decision, kept its key interest rate unchanged at 3.85%.

Australia’s HIA new home sales fell in April.

In the Australia, the Westpac leading index advanced in May.

Australia’s unemployment rate advanced in May, hitting its highest level since 2001.

In Australia, seasonally adjusted retail sales jumped on a monthly basis in May.

The Reserve Bank of Australia (RBA), in its latest monetary policy meeting minutes, indicated that Australia’s economy was experiencing its biggest economic contraction since the 1930s, however, the downturn could be shallower than earlier expected. Moreover, on the outlook front the central bank was still uncertain with the pandemic expected to have “long-lasting effects” on the economy. Also, the RBA reiterated that it would not increase the cash rate target until progress is made towards full employment and it is confident that inflation will be sustainably within the target band.

Reserve Bank of Australia’s (RBA) Governor, Philip Lowe, in his speech, warned that it is likely interest rates would remain at current low levels for an extended period of time given the disinflationary forces in the economy. Moreover, he reiterated that the central bank is prepared to do “whatever it takes” to boost growth, jobs and inflation.

In Japan, the national consumer price index (CPI) rose on an annual basis in May.

In Japan, total merchandise trade deficit unexpectedly narrowed in May.

The Bank of Japan (BoJ), in its latest monetary policy meeting, kept its key interest rate unchanged at -0.10%, as widely expected. Moreover, Governor Haruhiko Kuroda indicated that interest rates would likely remain ultralow into 2023 and warned that the coronavirus pandemic could end up having a longer-than-expected impact on the economy. Further, the central bank increased its lending support for companies to ¥110 trillion ($1 trillion) while leaving its main monetary policy settings untouched as it continues to monitor the economic fallout from the pandemic.

The Bank of Japan (BoJ), in its latest monetary policy meeting minutes, discussed the need for further increasing bond buying to support the economy. Moreover, board members expressed uncertainty over the timing of when the pandemic will be contained and its impact on overseas, domestic economies.




Image

Currency Update

The EUR ended lower against the USD last week, after Eurozone’s CPI declined to its lowest level since June 2016.
The British Pound ended weaker against the greenback last week, after the Bank of England (BoE) slowed the pace of its bond buying program.
The US Dollar ended mostly stronger against its major counterparts last week, after the US retail sales recorded its biggest monthly rise since 2001 in May.


Image

BoE boosts quantitative easing programme by £100 billion

The BoE, in its latest monetary policy decision, kept its benchmark interest rate unchanged at 0.1%, as widely expected. Additionally, the central bank increased its bond-buying programme by a further £100 billion to £745 billion, in an effort to support the economy affected by the coronavirus outbreak. However, the bank slowed the pace of its bond purchases. Further, the BoE warned that the outlook for jobs was “tilted to the downside”.


Image

The Week Ahead

Going ahead this week, investors will keep a tab on the US Chicago Fed National Activity Index, existing home sales, the Markit manufacturing and services PMIs, the Richmond Fed manufacturing index, new home sales, housing price index, durable goods orders, initial jobless claims, goods trade balance for further direction. Additionally, Eurozone’s consumer confidence index, the Markit manufacturing and services PMIs along with Germany’s Markit manufacturing and services PMIs, the Ifo indices and the GfK consumer confidence index will keep investors on their toes. Also, UK’s Markit manufacturing and services PMI would garner significant amount of investor attention.


Image

Send us an email on research@decimalpointanalytics.com for your feedback

To make sure you receive all the emails from Decimal Point, please add us in your address book.

Image


Contact Us

5A, B-Wing, Trade Star Building, J. B. Nagar, Andheri-Kurla Road, Andheri (East), Mumbai - 400 059, Maharashtra, India

www.decimalpointanalytics.com | info@decimalpointanalytics.com | +91 22 4919 5200

×

Decimal Point Analytics (DPA) will process the information in this form to share information as requested. By checking the above box you confirm your acceptance to receive the communication. You can unsubscribe any time by clicking the ‘Unsubscribe’ link in the footer of any email you receive from us, or by contacting us at

We use cookies to measure website performance, provide social media features and personalize content.
Close this dialog to confirm you are happy with that, or find out more in the privacy statement.