Gerald Fitzgeralds Market Review July 6th

LAST WEEK IN 30 SECONDS...

In a week that saw Tesla become the most valuable car company in the world, global equities rose following favourable economic data. Eurozone inflation edged higher to 0.3%, 0.2% ahead of expectations, in addition to US manufacturing indicators rebounding positively. Most notably the monthly US unemployment fell to 11.1%, down from all-time highs of 14.7% in April 2020 and well ahead of expectations.

The risk-on sentiment saw the US tech heavy NASDAQ index posting a gain of 4.6% over the week, whilst the Chinese Shanghai shrugged off unrest in Hong Kong to finish the week 5.8% higher following similarly positive domestic economic data. Global equities in euro terms finished the week 2.8% higher.

THIS WEEK IN 30 SECONDS...

The week has started on a positive note with risk-on sentiment in Asia helping support markets moving higher. This is despite the continuing challenges facing countries to maintain the reopening of their economies, yet mitigate the contagion of Covid-19.

From an economic point of view, German factory orders disappointed this morning albeit offset by positive Eurozone retail sales. Elsewhere, German industrial production updates are due for release on Tuesday, whilst markets will look for continuing improvements in US jobless claims updates on Thursday.

EMERGING MARKET CURRENCY WEAKNESS CONTINUES

Emerging markets have seen significant weakness in their domestic currencies since the onset of Covid-19. Of those countries, Brazil has been particularly negatively affected with the Euro strengthening by over 32% versus the Brazilian Real over the year-to-date.