Gerald Fitzgerald’s Market Review August 6th

LAST WEEK IN 30 SECONDS...

There was a sharp decline in markets last week as concerns ratcheted up on the ongoing trade stand-off between the US and China. Any signs of a middle ground being reached were brushed aside as Donald Trump took to twitter to bemoan the lack of Chinese engagement. Markets reacted with global equities in euro terms down -2.75% over the week.

Unsurprisingly, the traditional “safe haven” assets saw considerable inflows last week with Gold, high quality government bonds and the Yen gaining over the week.

THIS WEEK IN 30 SECONDS...

It’s a short week for Irish business this week. Despite this week being the biggest week for corporate quarterly disclosures with over 5,000 announcements, markets will be closely drawn to political themes over the coming days. Market volatility has increased considerably with the US raising the stakes by branding China a currency manipulator.

Elsewhere from an economic data perspective, German monthly industrial production figures are due for release on Thursday.

THE FED’S INVERTED HEADACHE

Despite cutting US interest rates by 0.25% last week, the difference between US 10-year and 3-month treasuries persists in negative territory. With the metric seen as a guide to a potential recession, markets are looking for the US Federal Reserve to cut rates further to ease such a risk.