Global macro data suggest that economic activity could have bottomed out in 2Q20. World trade data (released by the CPB) showed that global trade volumes further shrank in May, by 1.1% compared with April. The rate of decline slowed compared with previous months. The fall in trade was the biggest among advanced economies and Latin America. As opposed to world trade, industrial production slightly rose in May, by 0.8% vs. the level seen in April. On a forward-looking basis, the JP Morgan Global Composite PMI (rising to 47.7 in June) indicated that in terms of economic activity the worst could be behind us. Although it is welcome news that global GDP could stabilise and start to gradually grow in 3Q-4Q20, the pace of the impending global economic recovery remains uncertain.
This week, investors will focus on the message Jerome Powell delivers following the FOMC’s regular rate setting meeting on Wednesday. Furthermore, the news flow related to the intensifying geopolitical tensions between the US and China, the Trump administration’s next economic relief bill and potential consequences of a renewed spike in covid cases will also influence global risk appetite.DOWNLOAD THE FULL ARTICLE View All Global Market Updates
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