US

The Dow, S&P 500, and NASDAQ 100 reached new record highs on the back of strong US economic data, and the Fed's downplaying of inflation risks. The latest initial jobless claims fell to a record low since March last year, and retail sales in March rose at the fastest rate in 10 months, reflecting the strength of the economic recovery. Despite the largest increase in CPI in nearly nine years, Fed Chairman Jerome Powell played down the risk of inflation, stating that rate hikes would be considered only after inflation and employment targets were met, easing fears of an early end to easy money. US bond yields fell, with the 10-year yield falling below the 1.6% level.

US stocks are back for another earnings season, with the financial sector leading the way, heavyweights such as Citigroup, Bank of America, Goldman Sachs, and JP Morgan Chase all reported favourable results, and 77.8% of the 36 reporting index constituents posted market beating earnings for the quarter, driving positive market sentiment. Next week, the US will release the preliminary Markit Manufacturing PMI for April, which is expected to improve further to 60.0.

Europe

European equities followed the US rally, with the pan-European Stoxx 600 hitting a record high following the footsteps of the German DAX and French CAC. Over the past 5 days ending Thursday, the UK, French, and German indexes gained 0.35 to 1.11%.  Francois Villeroy de Galhau, member of the ECB and President of the Bank of France, said that it was not time for the ECB to lift the exceptional measures and claimed that the rise in inflation in the region was only temporary in nature. In addition, the EU plans to issue around 150 billion euros of bonds annually until 2026 to finance the EU Recovery Fund. Next week, the ECB will hold an interest rate meeting, markets will be watching the outlook for the central bank's accommodative monetary policy in the face of continued economic strength.

China

Mainland stocks were relatively weak, the CSI 300 Index fell 1.37% over the week, while Hong Kong stocks managed to maintain around 1% in the green over the same period. China's economy recorded a strong growth, with GDP growing by 18.3% YoY in 2021 Q1, the highest growth rate since records began in 1992, but it was still slightly below market expectations of 18.5%. The market is concerned about the reform of the 'platform economy', Chinese regulatory authorities have asked 34 Internet platform companies to conduct their own inspections within one month, and will impose severe penalties if monopoly practices such as ‘platform exclusivity deals’ persists. Subsequently many companies in question have issued their 'Commitment to Operate in Compliance with the Law' and pledged to steer clear from the ill-advised practices. In other news, it is also reported that Huarong is planning to fully repay its offshore bonds due on 27 April, easing market concerns and lifting the overall Chinese offshore USD bond market. Next week, China will announce the LPR rate.