What mattered last week:
- An acceleration in new COVID-19 cases has created doubts about the growth outlook and saw the S&P500 fall -1.72% last week.
- Of particular concern, new cases in some U.S. states that may require a pause in the “re-opening” to suppress the surge.
- Partially offset by talk of another “very generous” U.S stimulus package, including direct payments to individuals.
- And also by a bounce in economic data that provides supporting evidence of an economic recovery.
- Volatility, as measured by the VIX index, closed relatively unchanged at 34.7.
- U.S. 10-year yields closed lower at 0.64%.
- Gold rallied over $27.00 for the week to close near $1771.50.
- Crude oil closed lower at U.S $38.49/bbl as questions over demand re-emerged.
- The ASX200 close the week slightly lower near 5900.
- In FX, the AUDUSD closed the week relatively unchanged near .6865.
For the week ahead, the key events are:
A key focus for traders again this week will be on new Covid-19 cases in parts of the U.S, China, and Australia.
Australia: Private sector credit, weekly payrolls and wages (Tuesday), building permits (Wednesday), trade balance (Thursday), retail sales (Friday)
New Zealand: ANZ business confidence (Tuesday), building permits (Thursday).
China: NBS manufacturing PMI (Tuesday), Caixin manufacturing PMI (Wednesday), Caixin services PMI (Friday).
Japan: Retail trade (Monday), employment and industrial production (Tuesday), Tankan business survey (Wednesday).
U.S: Pending home sales (Monday), S&P Case-Shiller home price index, consumer confidence (Tuesday), ADP employment, and ISM (Wednesday), FOMC minutes, and non-farm payrolls (Thursday).
- Non-Farm Payrolls (Thursday): The unemployment rate is expected to fall back to 12.2% from 13.3% in May as 3 million workers return to work following the reopening of the economy.
Canada: GDP (Tuesday), balance of trade (Thursday).
Euro Area: German inflation (Monday), EA inflation (Tuesday), German employment (Wednesday), EA employment (Thursday).
- Euro area employment (Thu): The COVID-19 rise in the euro area unemployment rate has been limited thus far. A rise in the unemployment rate from 7.3% in April to 7.5% is expected in May.
UK: Current account (Tuesday), GFK consumer confidence (Wednesday).
