In financial markets, gold[1] suffered the worst week in 5 months. This is as the Dow Jones[2] outpaced the tech-heavy Nasdaq[3] 100. Longer-dated government bond yields from the developed world accelerated higher, perhaps speaking to rising confidence in the broader economic outlook and creeping inflation expectations.
In foreign exchange markets, the haven-linked US Dollar[4] inched slightly lower. The Canadian Dollar[5] took the spot as one of the best-performing major currencies. The New Zealand Dollar[6] suffered this past week as the RBNZ left rates unchanged but left the door open to the option of implementing negative rates.
Initially, a key event risk heading into the new week was a 6-month review of the US-China phase one trade deal. But that has been postponed indefinitely according to people familiar with the matter. With that in mind, the week ahead is fairly light in economic event risk. Major US retailers like Walmart, Target and Home Depot will report earnings.
Japan’s second-quarter GDP print will offer further insight into the state of global economic health. This is as the Fed and ECB[7] release the minutes of their latest monetary policy meetings. Global equity markets remain overall jubilant despite the ongoing stalemate between politicians in the US over a second fiscal package. What else is in store for markets in the week ahead?
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Fundamental Forecasts:
Euro May Rise if Q2 GDP and PMI Data Reinforce Recovery Hopes[9]
The Euro[10] may rise if preliminary Q2 GDP data and PMI statistics shows a brighter than-expected-picture and kindle hopes of a smoother recovery.
