What mattered last week and a preview of the week ahead 23rd March

What mattered last week:

  • An extreme week of volatility as U.S. equity market fell ~15% as the spread of Covid-19 continued.
  • The impact of Covid-19 via border shutdowns, social distancing measures as well as the obvious impact on health impact presents a huge challenge and likely to result in a recession in several countries.
  • Central banks and governments responded by slashing interest rates, resuming/starting Quantitative Easing (QE) programs and boosting/announcing fiscal stimulus packages.
  • Yields in the U.S. 10-year bond fell back to near 0.84%, while gold closed ~$1500, after finding support near $1450.
  • Crude oil futures fell to near U.S$20.00/bbl a level not seen since 2002, before a modest bounce into the end of the week.
  • Locally, the ASX200 finished the week down another 13%, closing just above 4800.
  • In FX, the AUDUSD closed almost -6% lower near .5800c but not before trading to a new cycle low at .5510. 

For the week ahead, the key events are:

Australia: CBA business conditions PMI’s (Tuesday).

New Zealand: Balance of trade (Wednesday), ANZ Roy Morgan Consumer confidence (Friday).

China: Industrial profits (Friday).

Japan: Jibun bank business conditions PMI’s (Tuesday), BoJ Monetary Policy meeting minutes (Wednesday).

U.S: Markit business conditions PMI’s, new home sales (Tuesday), durable goods (Wednesday), jobless claims (Thursday), personal spending and income (Friday)

  • Jobless claims (Thursday): A large rise in jobless claims is expected.

Canada: Nothing of note.

Euro Area: German and EA Markit flash PMI’s (Tuesday), GFK German consumer confidence (Thursday).

UK: Markit/CIPS business conditions PMI’s (Tuesday), inflation (Wednesday), retails sales and Bank of England meeting (Thursday). 

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