This archive report was first published on 18 May 2020.
As the world grapples with the COVID-19 pandemic, the global markets have taken a hit. The resurgence of coronavirus cases, particularly in Wuhan, China, has weighed down investor sentiment, with fears that COVID-2.0 is gaining momentum.
On May 8, the US Federal Reserve emphasized that it will not play a part in pushing interest rates below 0%. This move comes as the US-China tensions reignited in the week, with President Trump threatening to expand sanctions beyond trade and technology.
On Friday, Trump ordered the main US federal government pension fund to shun Chinese stocks, opening a new front in the war. This move is significant, given that Q1 data reveals that Chinese direct investments in the US dropped to $200 million in comparison to an average of $2 billion per quarter in 2019.
Media reports also suggest that the White House has blocked a shipment of semiconductors destined to Huawei technologies from global supply chains.
On the currency front, the Turkish Lira remained battered in the week, with the dollar index falling about 0.15%. However, there was some reprieve on Friday on reports that Turkish authorities held talks with Japan and the UK on possible foreign funding.
The Euro was up 0.33% trading at $1.084 against the US dollar.
On Tuesday, the overall US Consumer Price Index (CPI) declined by 0.8 in April, indicating a fall in consumption across major industries. The CPI excludes volatile food and fuel costs.
On Wednesday, the weekly US Crude inventories fell by 700,000 barrels for the week ending May 8, marking the first weekly decline in 16 weeks, according to data from the Energy Information Administration.
On Thursday, US weekly unemployment claims seemed to be cooling off, with 2.981 million reported in the week, down from 3.3 million reported the previous week. However, employment stats across US markets remain devastating, with 36.5 million people having filed for unemployment in the last 7 weeks.
On Friday, data from the US Department of Commerce showed that retail sales plunged 16.4 percent in April, a measure of deteriorating American economic health.
