Weekly Market Recap

Confident

05/07/2021

Week in review

China’s PMI for manufacturing lower at 50.9
Australia housing finance up 4.9% m/m in May
Australia private sector credit 0.4% m/m

Week ahead

Australia RBA rate setting meeting
U.S. FOMC meeting minutes
China CPI inflation

Thought of the week

Concerns of another wave of COVID cases knocked Asian markets last week as investors tried to assess the potential to damage the economic recovery. Studies conducted so far show that existing vaccines provide a degree of protection against virus variants, suggesting that fatalities and hospitalisation rates may be lower. However, it may also mean that a greater share of a country’s population may need to be vaccinated to achieve herd immunity, delaying the re-opening in some parts of the world. The more contagious delta variant amplifies the risk in countries where the vaccination roll-out has been slow due to limited vaccine supply or a hesitant population. Meanwhile, the Eurozone and the U.S. are enjoying the benefits of economic re-opening that come with higher vaccination rates and consumer confidence numbers continuing to move higher (see chart). COVID is still a risk, but the strength of consumption is a powerful force.

U.S. and Eurozone consumer confidence still rising

Indices

Source: Conference Board, Eurostat, FactSet, J.P. Morgan Asset Management. Data reflect most recently available as of 02/07/21.
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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