Gerald Fitzgerald Market Review 8th June

LAST WEEK IN 30 SECONDS...

Markets rallied last week as the US economy received an adrenaline shot on Friday with US unemployment numbers showing a 1.4% improvement on the previous month’s rate, with headline numbers standing at 13.3%. This number was far better than the >19% rate anticipated. Incredibly, global equity returns in Euro terms now stand at -4.1% year-to-date.

Elsewhere, riots in the US continued to draw the media’s focus albeit not investors. The ECB also announced a further rise of €600bn in its purchasing program to aid the Euro economy through bond purchases helping push European equities higher.

THIS WEEK IN 30 SECONDS...

The week ahead sees a further shift from Covid-19 news to that of general economic indicators in developed nations. The picture is somewhat different amongst emerging markets like Brazil, however, where the scale of the contagion has seen some official Covid-19 statistics no longer being published.

Eurozone GDP updates due for release today but markets will likely focus more on the US Federal Reserve’s meeting on Wednesday to decide on interest rate policy. With markets rebounding and unemployment heading in the right direct, the US Fed will be keen to keep this momentum going and reaffirm its committed stance to underpinning the health of the US economy.

US$ STRENGTH DISSIPATES SENDING THE EURO HIGHER

2020 to date has seen significant currency movements, in particular across emerging markets. Amongst developed nations, the situation has not been too dissimilar. Since global markets have rebounded from March lows, the Euro has strengthened by over 5% to bring it back into positive territory versus the US$ for the year-to-date.