Market Update

Global equity markets closed the week on a positive note, buoyed by encouraging economic data indicating a continued global recovery.
For instance, Thursday's (August 13, 2020) US jobless claims revealed that the US job market is rebounding despite the recent resurgence in coronavirus cases. Additionally, US retail sales not only surpassed expectations but June's figures were also significantly revised upward. Coupled with increased mortgage applications and improving import prices, these indicators suggest that the US economy is steadily making its way back to normalcy after the initial shock of the pandemic.
Similarly, China's industrial production data for July provided compelling evidence that its economic recovery remains intact, showing a 4.8% increase.
Toward the end of the week, global equities experienced a slight pullback due to a stalemate in talks between Republicans and Democrats over a new virus relief stimulus package. Moreover, news of the postponement of the US/China phase 1 trade review over scheduling conflicts added to the market's cautious sentiment. However, President Donald Trump expressed optimism about the trade deal, stating that China is placing "the largest orders they've ever seen" with US farmers. He also mentioned his satisfaction with China's commitments to the trade deal, as conveyed by Robert Lighthizer, the US Trade Representative. This suggests that the delay might be to provide China more time to meet its target for purchasing US goods, ultimately greenlighting the six-month trade review.
In the upcoming week, attention will be focused on the US weekly jobless claims data (on Thursday, August 20, 2020). Additionally, the release of minutes from the last Federal Reserve meeting on July 29, 2020, is eagerly anticipated. Other crucial US data includes PMI figures, the Empire State Manufacturing index, the Philadelphia Fed Manufacturing Index, building permits, housing starts, and existing home sales.
In the UK, key data points include CPI inflation, retail sales, and PMI data. Moreover, the Eurozone will release CPI and PMI figures, while Japan's Q2 GDP data is also awaited. Stay tuned for further updates in our upcoming commentary.