US

The covid-19 death toll in the US has increased to more than 70,000, more than 20,000 of which were in New York State. US President Trump has expressed the desire to restart economic activities as soon as possible, reflecting the downward pressure on the US economy. Over the past 5 days ending Thursday, among the three major US stock indexes, the NASDAQ rose around 1%, while the S&P 500 and the Dow fell around 1% to 2%. In terms of economic data, initial jobless claims exceeded 3 million for the 7^th consecutive week, ADP data showed that US companies laid off a record high of over 20 million workers in April. Although the data shows a bleak economic outlook, the chairman of the US Federal Reserve Bank of Atlanta claimed that under the effect of economic stimulus, the United States is unlikely to experience a deep recession in the short term. Facing the pressure of huge fiscal expenditures, the US Treasury raised the forecast of bond issuance in the second quarter of this year to a record of nearly 3 trillion US dollars. US will release CPI and retail sales data next week.

 EU

The epidemic seems to be getting under control in Europe, many countries including Italy, Germany, and France have begun to lift their lockdown measures in stages. However, the European stock market saw some correction after the recent rally. Over the past 5 days ending Thursday, French, German, Spanish and Italian indexes fell 3.14% to 4.60%. The Bank of England maintained its policy rate unchanged at the record low of 0.1%, but hinted that it might consider further loosening next month. The European Central Bank President Lagarde mentioned the need to utilise unconventional policy tools during “extraordinary times”, market expects the loose monetary policy in the Eurozone to stay. Next week, 2020 Q1 GDP data for the Eurozone and the United Kingdom will be released.

China

Controversy about the origins of the covid-19 virus has raised Sino-US tensions once again, US President Trump also questioned whether China is fulfilling the provisions of the first phase trade deal. The series of negative news pressured the market downwards, the Hang Seng Index gapped lower on Monday, falling over the week. The latest news on Sino-US trade relations  were positive, it was reported that the top trade negotiators from both sides held a phone call on Friday, promising to create favourable conditions for the implementation of the trade agreement. China will announce data on CPI and fixed investment next week.

<Prepared by Harris Fraser Research Team>