European and US markets continue to re-open and confidence is surging. Equities rallied strongly, up over 3% for the week and more than 4% for the month. The much vaunted ‘V shaped’ recovery is well underway. The market was lower early on Friday, but a recovery rally ensued, after the US did not break the US/China trade deal. President Trump has taken a stronger stance on China, following the aggressive behaviour of the Chinese in Hong Kong, South China Sea, Taiwan and India. The virus pandemic appears to have been a trigger for contentious Chinese conduct. Trump committed to action and may impose sanctions on the Chinese Communist Party, but the trade agreement remains in place, to date.
The growing confidence has allowed the US Dollar to settle, with the EUR breaking 1.1100, while the GBP traded above 1.2350. Global trade has failed to become serious threat to the market sentiment, up until now, allowing the trade exposed commodity currencies to flourish. The NZD has rallied to 0.6200, while the AUD has traded above 0.6650, with the RBA Rate decision to come on the first Tuesday of June. Serious trade disruptions, between China and the USA, will translate directly into these currencies.
The global economic re-opening and Chinese Geo-Political behaviour and consequences remain the focus of markets.
|Dates & Headlines|
1/6 Australia Manufacturing PMI, Japan Manufacturing PMI, UK/France/Germany/EU Manufacturing PMI, US Manufacturing PMI
2/6 ISM Manufacturing, NZ Building Permits, NZ Trade Exports/Imports, Australia New Home Sales, Australia Current Account, RBA Rate Decision, UK House Prices
3/6 Australia Construction, Australia Services/Composite PMI, Japan Services/Composite PMI, Australia GDP, Australia Building Permits, China Services/Composite PMI, German Employment, UK/France/German/EU Services/Composite PMI, US Weekly Mortgage Applications, ADP Jobs Report, US Services/Composite PMI
4/6 US Factory Orders, ISM Non-Manufacturing PMI, Australia Trade Exports/Imports, Australia Retail Sales, EU Construction, EU Retail Sales, Challenger Jobs Report, ECB Rate Decision, US Trade Exports/Imports, US Weekly Jobless Claims
5/6 Japan Consumer Confidence, German Factory Orders, UK House Prices, Non-Farm Payrolls, US Employment