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Weekly Market Commentary Equity market closed sharply lower to close what has been a spectacular week of recovery in the global share markets. Central Banks and Governments have stepped up monetary and fiscal stimulus/support packages that seemed to satisfy markets. The Fed led the way with 'QE Infinity' while the US Congress passed a $2 Trillion support/bailout package, the largest in US history. These seemed to give markets confidence, with equities surging and the safe haven Dollar settling lower.
All of the global monetary and fiscal measures are an effort to keep economies alive, as Governments have put them on an induced coma, in the struggle against the pandemic. These efforts are an attempt to withdraw labour from economies, in an effort to prevent the spread of the coronavirus, thus killing economic activity. The plan is to shut down the economy, for a limited period and isolate people to prevent the hyper-spread of the virus. While the country is shut down, authorities must prepare for the return to work, building medical facilities and supplies in preparation. Global economies will collapse, unless their is a return to work, in a short period of time. The key is to protect the vulnerable, identify and isolate the sick and get the healthy back to work.
Economies need to reboot and the 'herd infection' is the only way to combat this devastating pandemic. This must be managed correctly as there are deadly consequences, until cures and vaccines are identified. The pressure on the safe haven US Dollar subsided, as markets surged with renewed confidence, allowing the GBP to charge to 1.2450. Commodity currencies were major beneficiaries of the unfavoured reserve, with the AUD jumping to 0.6170, while the NZD spiked to 0.6040. These currencies remain vulnerable and volatile, while massive downside risks to markets remain.
Global rates of infections and deaths continue to rise and containment and control, are key to moving past this medical crises. The economic recovery plan is coming together nicely and await the greenlight from authorities, once the medical emergency is stabilised. Weekly Market Calendar 30/3 EU Consumer Confidence, German CPI
31/3 US Pending Home Sales, Dallas Fed Manufacturing Activity, NZ Building Permits, Australia Consumer Confidence, UK Consumer Confidence, Japan Employment, Japan Industrial Production, NZ Business Confidence, China Manufacturing/Non-Manufacturing/Composite PMI, Japan Construction, Japan Housing Starts, German Employment, UK Current Account, UK GDP, EU CPI, Canada GDP, Canada Industrial Production, S&P Case Shiller Home Price Index, Chicago Purchasing Manager
1/4 NZ House Prices, Australia Manufacturing PMI, Australia House Prices, TANKAN Report, Australia Building Approvals, Japan Manufacturing PMI, China Manufacturing PMI, Australia Commodity Prices, Italy/France/Germany/UK/EU Manufacturing PMI, EU Employment, US Weekly Mortgage Applications, ADP Private Sector Jobs, US Manufacturing PMI
2/4 ISM Manufacturing, US Construction, EU PPI, Challenger Jobs Report, US Weekly Jobless Claims, US Trade Exports/Imports
3/4 S&P Sovereign Debt Rating France & Germany, US Durable Goods Orders, US Factory Orders, Australia Services/Composite PMI, Australia Retail Sales, China Services/Composite PMI, Italy/France/Germany/UK/EU Services/Composite PMI, EU Retail Sales, Non-Farm Payrolls, US Employment, China Services PMI, ISM Non-Manufacturing/Services
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