Global market sentiment cautiously deteriorated this past week, aiding to rekindle strength in the haven-linked US Dollar[1]. The Dow Jones[2] and S&P 500[3] – frequent go-to’s for gauging overall risk appetite – declined. An uptake in Treasuries depressed front-end government bond yields, boosting anti-fiat gold prices[4]. Crude oil[5] still managed to find some cautious upside momentum.
Fed Chair Jerome Powell may have played a role here as he cooled expectations of negative rates out of the world’s largest economy. Meanwhile central banks from other developed countries[6] offered caution for medium-term growth prospects. Likely aiding to deter further losses in equities was the fastest increase in the Fed’s balance sheet in over 3 weeks as it bought corporate debt.
As more countries and states in the US take measures to gradually ease lockdown measures, all eyes remain on the threat of a second coronavirus wave. The longer nations have to remain in lockdown, or perhaps reinstate previous measures, the more expectations of a swift economic recovery may be ebbed. The US is anticipated to see almost 2.5 million jobless claims ahead.
FOMC[7] meeting minutes and more commentary from Chair Jerome Powell may be closely scrutinized for views on growth. Earnings are also still due for Walmart and Home Depot - US retail giants. About two-thirds of local GDP lays in consumption and retail sales shrunk the most on record in April – and by a large miss.
Outside of the United States, the European Commission is anticipated to update on economic policy recommendations. Japan – the world’s third-largest economy – is expected to shrink -1.1% in the first quarter. The Euro[8] may closely watch
