25 to 31 May: Re-opening economies and politics to shape markets

As we noted in the previous week’s Global Markets Update, geopolitics have returned to the limelight, again, although it has not dented global market sentiment significantly yet, in our opinion. On a forward-looking basis, we see two key themes unfolding: (1) governments experimenting with re-opening their economies, whilst attempting to prevent a second wave of large-scale spread of the coronavirus and (2) domestic and geopolitics in all shapes and forms hijacking headlines, such as the re-escalation of the US-China standoff, the upcoming Presidential elections in the US, unrests in the US or the Chinese administration’s intervention in Hong Kong’s legal system through the new national security law, which in turn risks Hong Kong’s special status under US law.

Later this week, the devastation of the coronavirus pandemic on the US’ labour market will be showcased by the monthly jobs report, which could show an unemployment rate hitting 20% in May. This would be highest jobless rate since the Great Depression at the end of 1930s.

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