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Archinomics Weekly - Monday 29th March 2021

21 days ago

the
MARKETS

Equities

US stock markets finished the week in positive territory, as investors weighed up the reopening of the American economy with growing inflation concerns. European stock markets were mostly positive, although France’s CAC 40 index fell 0.8%. Emerging markets had a tougher week, with the MSCI Emerging Market index ending 2.2% lower. In Asia, the Japanese Nikkei 225 fell 2.1%, while Hong Kong’s Hang Seng index lost 2.3%. China finished the week up 0.4%.

Bonds

The highly watched 10-year US Treasury yield fell back below 1.7%, finishing the week at 1.68%. There was strong demand for US Treasuries at last week’s auctions, which helped to settle longer-dated bond prices. In Europe, government bond prices rose as rising Covid-19 worries pushed up demand for higher-quality bonds. Investment grade and high yield bond prices rose in the US and Europe.

Currencies

The safe-haven US dollar was stronger over the week, rising against the euro and sterling. The euro fell against the dollar and sterling, while sterling was stronger against the euro but weaker against the dollar. Elsewhere, the Turkish lira fell dramatically as President Erdoğan sacked the chief of the country’s central bank.

Commodities

Brent Crude oil was slightly higher last week, finishing at $64.60 per barrel. A blockage of the Suez Canal stoked fears of supply disruption pushing prices higher, but fresh lockdown measures then weighed on the demand outlook. The price of gold fell 0.7% over the week to finish at $1,732 per ounce.

Responsible investing

The World Economic Forum has endorsed a set of global standards for the reporting of ESG issues in company accounts. The standards are being developed by the IFRS Foundation, a non-profit organisation based in the US. A lack of standardisation has been a key issue in the reporting of ESG issues, as it makes it more difficult for investors to compare companies based on their ESG risks and performance.

MACROECONOMIC
UPDATE

Jerome Powell, Chairman of the Federal Reserve, and Treasury Secretary Janet Yellen both testified before Congress. They attempted to appease markets, promising to continue providing support for as long as it is needed.


There were rising Covid-19 infection rates in several US states and in parts of Europe, with new lockdown measures announced for the latter.

on the
RADAR

US employment data will be released this week. Federal Reserve Chair Jerome Powell is tightly focused on the strength of the labour market, so the data release will be watched closely.


Purchasing Managers Index (PMI ) data from China will be released on Wednesday and Thursday, with expectations of a slight pick-up in growth compared to last month.

Listen to our weekly podcast for more information and our experts’ insights.

Architas

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