Weekly Market Recap
Asia Pacific
27/04/2020
Week in review
- WTI oil price falls to -$37 as supply outpaces demand
- RBA downgrades economics outlook, -6% growth in 2020
- Australian retail sales surge nearly 9%y/y from hording effects.
Week ahead
- Australia CPI inflation
- U.S. real GDP for 1Q20
- U.S. Federal Reserve meeting
Thought of the week
R.E.M sang “it’s the end of world as we know it, and I feel fine.” Markets seem to feel the same way. The Eurozone PMIs released last week plunged to record lows. The composite index which includes both manufacturing and services was just 13.5pts in April. During the GFC the lowest the index got was 36.2. Unsurprisingly, the services sector accounts for much of the weakness. Despite the fact that services make up 75% of the Eurozone economy markets shrugged off the numbers, preferring to pin their hopes on a regionwide economic recovery fund to pull the single currency bloc out of recession. Given the pace with which European leaders move that may take a while. But it also may be the case that the April figures mark a low for many of these indicators.
Eurozone PMI a gauge of what’s to come
Eurozone composite PMI
Source: Markit, 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.
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