THE WEEK AHEAD: BUSY INTERNATIONAL CALENDAR
Mark Lister, 12 July 2021
Global sharemarkets were mixed last week. The S&P 500 ended the week up 0.4% at new record highs, although it was a bumpy five days. UK shares were flat, Europe was marginally higher while the Australian market and the local NZX 50 both declined during the week.
The US 10-year Treasury yield ended the week at 1.36%, compared with 1.42% seven days earlier. That’s well down from 1.74% three months ago, and financial markets have been a little unnerved by the volatility in longer-term bond yields.
The spread of COVID-19 will remain in the spotlight in the days ahead, as the delta variant proves troublesome. The UK will be closely watched, with the Government set to confirm if the planned easing of restrictions will go ahead on July 19.
On the international calendar, investors will be paying attention to Federal Reserve Chair Jerome Powell’s congressional testimonies. Powell will speak to the House Financial Services Committee on Wednesday, and then the Senate Banking Committee on Thursday. One would expect his remarks to mirror last week’s June meeting minutes, although given the recent decline in bond yields (amidst speculation the recovery is faltering) his comments will still be closely watched.
US inflation figures and retail sales for June will be in focus, as will the meeting between US President Joe Biden and German Chancellor Angela Merkel at the White House on Thursday. China will be in the spotlight, with June quarter GDP figures and monthly activity indicators due for release on Thursday afternoon.
The international reporting season also begins this week, with the highlights likely to be earnings releases from financial heavyweights Goldman Sachs, JP Morgan, Bank of America and Wells Fargo, as well as PepsiCo and UnitedHealth.
It’s a busy week here in New Zealand too. The Reserve Bank of New Zealand decision on Wednesday is the clear highlight, although Friday's release of the June quarter CPI will also be of significant interest.