Gerald Fitzgerald’s Market Review 19th August

LAST WEEK IN 30 SECONDS...

Markets last week endured their most volatile week of the year thus far with the threat of a recession continuing to weigh heavy on market sentiment. This negative sentiment was offset somewhat by the US postponing further trade tariffs on China until December.

Despite the negative sentiment, global equities in euro terms saw only marginal losses last week falling by -0.38%.

Elsewhere, government bonds continued to see further investor flows over the week with the 10-year German bund yield breaching -0.70%, before ending the week at -0.68%.

THIS WEEK IN 30 SECONDS...

Wednesday sees the release of the US Fed’s minutes from its July meeting, with Fed Chairman Jerome Powell also due to speak on Thursday. Markets will crave guidance on further support being pledged to help manage interest rates amidst the current uncertainty. No doubt, expect a number of tweets by Donald Trump pressing for further rate cuts.

The road to Brexit continues with the release of the Project Yellowhammer report at the weekend adding further fuel to the UK’s already controversial declaration to leave the European Union on deadline day with or without a deal.

From an economic data perspective, Thursday sees US and Eurozone PMI manufacturing data releases.

NOW THAT’S WHAT YOU CALL VOLATILITY

Argentina’s stock market plunged last week along with the Peso as a primary election saw heavy losses for the sitting president, Mauricio Marci. Investor panic set in with the domestic stock market falling by over 35% and the Peso falling by over 20% versus the US dollar. The global picture doesn’t seem relatively that bad after all.