What mattered last week and a preview of the week ahead

What mattered last week:

• After strong gains the previous week, U.S. equity markets fell 2.1% as the COVID-19 crisis deepened.
• However, volatility continues to subside from the extreme levels of March and a reliable measure of overall volatility, the VIX Index has dropped over 45% from recent highs.
• Economic data confirming the impact of the crisis as jobless claims in the U.S. rose by 6.65 million, taking the 2 week total to almost 10 million.
• Ensuring yields on U.S. 10-year bond ratcheted lower again to close near 0.59%.
• Following a strong rally the previous week, gold eased -0.50% last week, to close near U.S $1618.
• Undoubtedly the star of last week’s show, crude oil futures, which rallied over 30% to close the week above U.S $28.00/bbl on reports of production cuts.
• Locally, the ASX200 benefiting from the Australian government’s management of the COVID-19 crisis and its wage subsidy program to close the week over 4.5% high at 5067.5.
• In FX, the AUDUSD fell over 2.50% to .6000c as the U.S. dollar recovered some of the previous week’s losses.

For the week ahead, the key events are:

Australia: Balance of trade, RBA interest rate decision (Tuesday), housing finance (Wednesday), RBA financial stability review (Thursday).

• RBA interest rate decision (Tuesday): After cutting rates by 50bp in March and starting QE, the RBA is expected to keep rates on hold this month at their lower bound of 0.25%.

New Zealand: NZIER business confidence and Global Dairy Trade auction (Tuesday).

China: CPI and PPI (Friday).

Japan: Current account, machinery orders (Wednesday), machine tool orders (Thursday).

U.S: JOLTS job openings (Tuesday), FOMC meeting minutes (Thursday), CPI (Friday).

• FOMC meeting minutes (Thursday): Is likely to confirm the Federal Reserve is prepared to ease again if needed.

Canada: BoC business outlook survey (Monday), IVEY PMI (Tuesday), housing starts and building permits (Wednesday), employment (Thursday).

Euro Area: German factory orders (Monday), German industrial production (Tuesday), German balance of trade and current account (Thursday).

UK: GDP (Thursday).