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Archinomics Weekly - Monday 12th April 2021

one month ago

the
MARKETS

Equities

US markets powered ahead, led by the Nasdaq, as tech stocks rallied. European markets were boosted by hopes of continued fiscal and monetary stimulus, while the UK’s FTSE100 outperformed as sterling slipped back. In Japan the Nikkei 225 broke through 30,000, before ending the week slightly lower, while China’s CSI 300 extended several weeks of underperformance.

Bonds

Longer dated US Treasury bond markets rose, reassured by comments from the US Federal Reserve (Fed) that an inflation spike should prove temporary. European government bond markets weakened, however, as the ECB hinted at a tapering of its bond buying programme. Credit markets were firmer, with US high yield as the outperformer. Emerging market debt performed in line with developed markets.

Currencies

The US dollar was weaker against all majors except sterling, which fell across the board. The euro had a strong week, as did the yen against all majors, except the euro.

Commodities

Oil fell on a weaker demand outlook, as the Fed characterised the global recovery as fragile until Covid-19 is under control.

Responsible investing

The BlackRock US Carbon Transition fund became the biggest ETF launch ever, as institutional investors put $1.25bn into the fund aimed at identifying the winners of the move to a low-carbon world.

MACROECONOMIC
UPDATE

The Fed published minutes of its last meeting, stressing the focus on reducing unemployment, as well as a willingness to look through any temporary spike in inflation.


The IMF predicted the pandemic would bring little lasting damage to the world’s major economies, raising its global growth target to 6% for 2021.


Eurozone PMI data showed a sharp rebound to its highest level since July, boosted by the strongest manufacturing performance in 24 years.

on the
RADAR

US March retail sales, a key gauge of the strength of the recovery, are forecast to show an increase of almost 6%.


China’s Q1 GDP is expected to rebound by 18.6%, after the pandemic struck growth in the same period of last year.

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