Macroeconomic/ geopolitical developments
- The US stock market “risk on” theme has extended into latter August, with the US benchmark average, the S&P 500 prodding to a new all-time high.
- Wednesday’s meeting minutes from the FOMC saw another downbeat assessment of the US economic recovery and notes of caution. Plus, the Fed also backed away from a guidance shift at the September meeting.
- However, the Federal Market Committee (FOMC) meeting minutes on Wednesday have produced mixed reactions from different financial market asset classes, as we look at below.
- Macroeconomic data was broadly positive again last week, with UK inflation and Retail Sales data beating expectations, European Flash PMI data from Markit mixed but mostly better than consensus. But US Jobless Claims disappointed on Thursday.
- There continue to be some improvements in the number COVID-19 cases, hospitalizations and deaths in some of the more “at risk” US states.
- But Europe is seeing widespread coronavirus breakouts in Croatia, Slovenia, Malta, Austria, Hungary, Greece, Spain, France, Germany, plus the lockdown in Victoria State in Australia remains of concern.
- There seems to be possible progress among US lawmakers for new coronavirus relief and stimulus measures.
- Mixed messages on the future of US-Sino trade talks, with China implying talks are due soon, but with the US denying this.
- The UK/ EU trade talks have resumed but remain at an impasse.
Global financial market developments
- US equity indices have pushed higher with the S&P 500 prodding to a new all-time high and the Nasdaq again charging to the topside to another new record level.

- European stock averages (the German DAX and UK FTSE 100 for example), have seen August recovery efforts stall, leaving more neutral themes.
- US Treasury Bonds yields (and global bond market yields) have fallen, starting to push back towards historic low yields, reflecting recovery concerns since the FOMC meeting minutes.
- Mixed message from the currency markets too, as the US Dollar started the week lower, but rebounded after the Federal Reserve minutes.
- In the commodity space, Copper hit a new multi-month high before correcting lower again, Gold has been erratic since the new multi-year high in early August and Oil remains sideways, resilient but cautious.

Key this week
- Central Bank Watch: Noting of note directly from the major Central Banks, but the Jackson Hole Symposium is on Thursday and Friday, with Jerome Powell due to speak Thursday.
- Macroeconomic data: This week brings US Consumer Confidence, Durable Goods Orders, GDP, PCE and Jobless Claims. From German we get GDP, IFO Survey data and CPI. Plus, Canadian GDP and New Zealand Retail Sales are released.
Date | Key Macroeconomic Events |
24/08/20 | New Zealand Retail Sales |
25/08/20 | German GDP and IFO; US Consumer Confidence |
26/08/20 | US Durable Goods Orders |
27/08/20 | Jackson Hole Symposium (Powell to speak); US GDP, PCE, Jobless Claims |
28/08/20 | Jackson Hole Symposium; German CPI; US PCE; Canadian GDP |