Weekly Market Recap
Asia Pacific
20/04/2020
Week in review
- Australian unemployment rate rises to 5.2%
- Business confidence collapses to 75.6
- Consumer confidence plunges to -65.6
Week ahead
- RBA meeting minutes
- Eurozone PMI for manufacturing and services
- U.S. PMI for manufacturing and services
Thought of the week
The Australian dollar has shown remarkable strength since hitting a low in the middle of March. The lower rates of viral spread and success of containment measures, along with the outperformance of iron ore relative to other bulk commodities due to measures taken by Chinese officials, to support the economy have supported AUD. Meanwhile, the RBA’s approach to QE has been relatively constrained compared to other central banks. All this means that the Aussie dollar could be stronger in the near term but this doesn’t alter the factors that could weigh on growth and the currency once the COVID-19 crisis passes. Household leverage remains an issue, while consumption patterns may change as the record economic expansion comes to an end.
AUD showing remarkable strength
Performance vs. the USD since March 19 low
Source: FactSet, J.P. Morgan Asset Management, all returns in local currency unless otherwise stated.
Equity price levels and returns: Levels are prices and returns represent total returns for stated period.
Bond yields and returns: Yields are yield to maturity for government bonds and yield to worst for corporate bonds. All returns represent total returns. AusBond Comp is the AusBond Composite 0+ Yr, AusBond IG is the AusBond Credit 0+ Yr both provided by Bloomberg.
Currencies: All cross rates are against the Australian dollar. An appreciation of the foreign currency against the Australian dollar would be positive and a depreciation of the foreign currency against the Australian dollar would be negative.
For more information, please call or email us. You can also contact your J.P. Morgan representative.
1800 576 100 (Application enquiries)