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Market Report 18th May 2020

Market Report 18th May 2020 981 980 Realm

European markets are higher this morning as more businesses open and confidence rises.

 

  • On Friday: European stocks shrugged off a mid-session setback and recovered well to close on a positive note, as investors picked up stocks, digesting news about coronavirus infections, U.S.-China tensions and global economic data.
  • US stocks saw considerable volatility during trading after coming under pressure early in the session. The major averages bounced back and forth across the unchanged line before eventually closing in positive territory.
  • Asian stocks turned in a mixed performance as signs of the gradual reopening of businesses around the globe, including the United States, were offset by concerns that a trade deal between the U.S. and China is in peril.

Global Macro

  • Minutes from the Fed, ECB and RBA will be in the spotlight this week, while central banks in China, Turkey, Indonesia, Thailand and South Africa will be deciding on interest rates. Meanwhile, flash PMI surveys for the US, UK, Eurozone, Japan and Australia will provide an insight into whether these economies recovered from April’s historical contractions as several countries emerged from coronavirus-related lockdowns. Other figures to follow include US housing data; UK jobs report and retail trade; Japan Q1 GDP and trade balance.
  • The number of confirmed cases of coronavirus around the world surpassed 4.6 million, of which more than 310 thousand died and near 1.7 million recovered. In the US, the epicentre of the disease, the number of infections surpassed 1.4 million, more than one-third of global total. Russia, now the second worst-hit country, registered 281,752 cases, followed by the UK (241,461) and Brazil (233,648). The US is the country with more deaths caused by the virus (88,898), followed by the UK (34,546) and Italy (31,908).
  • Fitch Ratings changed on Friday 15 May 2020 France’s sovereign credit rating outlook to negative from stable and affirmed the debt grade at AA, citing as main trigger behind the revision the substantial worsening in public finances and economic activity expected this year due to the COVID-19 pandemic. Standard & Poor’s credit rating for France stands at AA with stable outlook. Moody’s credit rating for France was last set at Aa2 with stable outlook. DBRS’s credit rating for France is AAA with negative outlook.
  • The yield on the US 10-year Treasury note rose to 0.64% on Friday but ended the week 3.9bps lower, as investors’ risk appetite continued to decline amid renewed trade tensions between the US and China and poor economic data. The Federal Reserve Chairman Jerome Powell said that additional fiscal and monetary policy measures may be needed to support the US economy amid a prolonged weak economic growth, but ruled out any interest rate cut.

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