Gerald Fitzgerald’s Market Review October 5th
05 October 2020
LAST WEEK IN 30 SECONDS...
Global equity markets climbed higher in a week which saw political themes dominating media headlines. First, there was the rather uninspiring US presidential debate which left a bewildered US electorate and onlookers alike questioning whether they were really watching two candidates vying for the premier US job. Subsequently, on Friday the news broke that Donald Trump had contracted Covid-19.
Elsewhere, the European Commission initiated legal proceedings against the UK for seeking to breach the UK’s exit terms from the European Union. Global equities brushed aside the political shadows to rise by 0.8% over the week.
THIS WEEK IN 30 SECONDS...
The week ahead will see some limited albeit meaningful economic data releases. These include Eurozone retail sales today followed by German industrial orders tomorrow. The week also sees speeches from US Fed Chair Jerome Powell, and ECB President Christine Lagarde.
Talks are continuing on the terms of US stimulus with investor optimism increasing that terms can be agreed on further stimulating the US economy. Closer to home UK and European Commission talks on agreeing a trade deal continue.
INFLATION OUTLOOK REMAINS BENIGN
Conversations about inflation continue to suggest the potential for inflation to kick into global markets. The medium term outlook, however, remains supressed. With the US inflation outlook standing at a mere 1.8% and the corresponding Eurozone outlook a paltry 1.1%, central banks will need to get innovative.