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US Markets closed out a very strong week, fairly neutral, but promised a lot. A week that was highlighted by massive gains in confidence and sentiment, reflected in equities. The progress towards a vaccine, from ‘Moderna’, spiked markets and the theme continued throughout the week. The US Dollar took a back seat, as confidence was on the rise, with global economies re-opening. The positive signs for markets, was slightly undermined by the rising trade tensions, with China.

China is now facing a global backlash from the release of the virus, on an unsuspecting world. World leaders have called for an international investigation into to origins of the pandemic and China’s role in this global crises. The Chinese are not being complacent and are actively fighting back. The Chinese are threatening German Car exports and Australian coal imports. They have also spoken of tariffs, on imports, from countries that actively call for Chinese accountability. The rising trade tensions are a threat to existing supply chain and the global economic recovery. The EUR drifted back to 1.0900, while the GBP fell to 1.2170, despite confident global share markets.

The trade exposed commodity currencies experienced huge rebound rallies, during the week of surging markets, but the Chinese trade tensions snuffed out these gains. The AUD dropped back to 0.6540, while the NZD slipped to 0.6100, amidst political ructions. Polls confirmed the strong position of the NZ Government and forced a leadership change in the opposition. The globally popular ‘Dear Leader’ will now be challenged by a new opposition leader. The re-opening of the economy, may reveal the devastation caused by the severe lock-down, which may assist the newly minted Opposition leader.

Global markets will continue to follow the progress of re-opening economies and the infection rates resulting. It appears that the worst of the flu pandemic is behind most Western economies. It is time to re-open and get back to business.

Dates & Headlines

25/5 US Memorial Day Holiday, German GDP, German IFO Business Climate
26/5 NZ Trade Exports/Imports, German Consumer Confidence, Chicago Fed National Activity Index, ECB Report, Case Shiller Home Price Index
27/5 US Consumer Confidence, US New Home Sales, Australia Construction, US Weekly Mortgage Applications
28/5 Richmond Fed Manufacturing Index, Fed’s Biege Book, NZ Business Confidence, EU Consumer Confidence, German Inflation, US Durable Goods Orders, US GDP, US Weekly Jobless Claims
29/5 US Pending Home Sales, Kansas City Fed Manufacturing Index, NZ Consumer Confidence, Japan Employment, Japan Industrial Production, Japan Retail Sales, EU Inflation, Chicago PMI, University Of Michigan Sentiment


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