| Weekly Market Commentary Markets closed the week flat, after posting strong gains in equities during the week, despite surges in virus infection rates in the USA. Markets are overlooking surging 'second wave' infection levels, as Government's in the US and Australia re-impose restrictions, in an effort to contain the virus. The EU are meeting to green-light a EUR $750 Billion bailout/stimulus, with the majority of member states supporting the emergency measure, although there are members who could sabotage efforts? The problem is not the stimulus package, but the collective responsibility for debt repayment! The EUR jumped to 1.1435, while the Yen traded 106.90, as the Dollar settled.
US markets are battling the explosion of 'second wave' infections, while news on treatments and vaccines continue to support positive sentiment. The real threat to global markets is the Chinese geo-political situation. The aggressive Chinese foreign policy has drawn push back from western nations. The US, UK and Australia have led responses to the Chinese behaviour in Hong Kong and now may be about to address the part the CCP played in the global pandemic. The rhetoric is becoming more accusatory and defined and there is talk that CCP members, could be banned from travel to the USA!?
China remains central to the global supply chain and vital to the trade exposed commodity nations. Markets have shrugged off the virus and are forward looking, allowing the safe haven status of the US Dollar, to lessen. This has allowed the AUD to regain 0.7000, despite the 'second-wave' of the virus and lock-down in Melbourne, while the NZD looks to regain 0.6550. The EU meeting to decide the viability of the bailout/stimulus package could determine the mood of markets when they re-open the new week. Weekly Market Calendar 20/7 NZ Services PMI, Japan Trade Exports/Imports, Bank of Japan Minutes, EU Current Account
21/7 Japan Inflation, RBA Minutes, Chicago Fed National Activity Index
22/7 NZ Dairy Prices, Australia Leading Index, Japan Services/Manufacturing/Composite PMI, US Weekly Mortgage Applications, US House Price Index
23/7 US Existing Home Sales, US Weekly Jobless Claims
24/7 EU Consumer Confidence, US Leading Index, Kansas City Fed Manufacturing Index, NZ Trade Exports/Imports, Australia Services/Manufacturing/Composite PMI, UK/France/German/EU Services/Manufacturing/Composite PMI, UK Consumer Confidence, UK Retail Sales, US Services/Manufacturing/Composite PMI, US New Home Sales
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