Markets had a tough week, spooked by the virus surging in Brazil and India, while the US, Europe, Australia and China suffer a resurgent second wave. The US GDP number, of a second quarter contraction of minus 32.9%, shocked markets by its sheer enormity. European countries are also beginning to reveal the state of the economic damage inflicted by the global pandemic, with France and Germany both revealing historical lows in GDP. The numbers are eye-watering, but will improve, off these record lows but the mayhem and damage will live on for a long time.
The pandemic is resurgent, which has taken the spotlight off the deteriorating relationship between China and a growing Western/Eastern alliance, which will impact the supply chain. The disruption coming from this Geo-Political crises has the capacity to seriously impact global trade. The US Dollar rebounded to close out the week, with the EUR falling below 1.1800, while the Yen moved back towards 106.00.
The week ahead is full of economic data releases and highlighted by Central Bank rate decisions from the Bank of England and the RBA. Sentiment will be dominated by the progress of the virus and Chinese Geo-Political relations. The US Dollar showed signs of life, to close out the week, with the AUD falling back below 0.7150, while the NZD retreated to 0.6620.
Weekly Market Commentary 3rd August 2020
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Markets had a tough week, spooked by the virus surging in Brazil and India, while the US, Europe, Australia and China suffer a resurgent second wave. The US GDP number, of a second quarter contraction of minus 32.9%, shocked markets by its sheer enormity. European countries are also beginning to reveal the state of the economic damage inflicted by the global pandemic, with France and Germany both revealing historical lows in GDP. The numbers are eye-watering, but will improve, off these record lows but the mayhem and damage will live on for a long time.
The pandemic is resurgent, which has taken the spotlight off the deteriorating relationship between China and a growing Western/Eastern alliance, which will impact the supply chain. The disruption coming from this Geo-Political crises has the capacity to seriously impact global trade. The US Dollar rebounded to close out the week, with the EUR falling below 1.1800, while the Yen moved back towards 106.00.
The week ahead is full of economic data releases and highlighted by Central Bank rate decisions from the Bank of England and the RBA. Sentiment will be dominated by the progress of the virus and Chinese Geo-Political relations. The US Dollar showed signs of life, to close out the week, with the AUD falling back below 0.7150, while the NZD retreated to 0.6620.
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