Weekly Market Review by Anzo Capital
For the week of 20 Jul 2020
Is It Time To Bet Against The US Dollar?
After much doom and gloom there was resoundingly good news to end the week for UK and European economies. Purchasing Managers Index reports indicated a month of expansion for both Services and Manufacturing sectors for July. Europe’s largest economy, Germany, saw the first month of expansion in the manufacturing sector in 18 months. Given the impact the sector has on growth in the greater economy and the impending recession, the news will provide some respite to the markets. The rise in output comes amidst a breakthrough during the EU summit where leaders managed to agree a covid-19 bailout to the tune of 750 billion Euros. In the UK, the Services sector, which has been the backbone of the economy, hit a 5 year high in July reaching 56.6%; with the 50-mark representing expansionary territory, as the reopening of the economy spurred optimism.
The employment situation paints a bleak picture for anyone hopeful of a fast recovery in the U.S. Jobless claims spiked once again in the week ending the 17th July as the covid-19 situation persists in certain states, leading to a rise in new infections. After trending downwards for May and June, unemployment benefit claimants climbed to 1.4 million last week. A total of over 30 million citizens remain unemployed as of 4th July.
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