Daily Update - 16th June 2020
Chinese Industrial production Chinese Industrial production report for the month of May stands at 4.4% The Federal Reserve said Monday it will start buying individual corporate bonds. Previously, the central bank had been buying only ETFs and had said that it would be buying individual issuance on the primary market. This is one of the aggressive strategy taken by Fed to stimulate the economy and increase liquidity in the market. This can result in printing more virtual money and adding it to system to increase the liquidity. The move is clearly to save the economy from further crushes. The European share closed lower on Monday since the fear of second wave of corona. Sterling gained against the dollar on Monday as fears of a second wave of coronavirus hit risk sentiment and global markets. Lack of clarity in post brexit negotitayok deal is also keeping the pounds further uncertain. A fresh coronavirus outbreak in China and rising infection numbers in the United States even as major economies have begun lifting lockdowns put financial markets on the back foot at the start of the week, with selling of stocks and risk currencies across the board. On Tuesday, unemployment claims soared to a staggering 856.5 thousand in April, up from 12.1 thousand beforehand. Wage growth headed lower for a second successive month in March. The indicator slipped to 2.4%, down from 2.8% beforehand. Analysts are braced for wage growth to fall to 1.4 percent. The unemployment rate, which has been hovering around 4%, is projected to climb to 4.7 percent. From US, retail sales is a key gauge of consumer spending. April was disastrous, with a loss of 16.4 percent. Core retail sales, which excludes the most volatile items, was even worse, dropping 17.2 percent. Better news is forecast for May, with estimates of 7.4% for the headline read and 5.5 for core retail sales.Yesterday’s Market
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From Japan, the Bank of Japan is expected to maintain its main policy tools at this week’s meetings. There is a strong likelihood that policymakers will increase its loan support for businesses.
