Daniel Casali provides a round-up of key market activity during the week of 18th May.
- Footfall in the UK highstreets dropped by 81.8% compared with April 2019, according to data from the British Retail Consortium.
- US retail sales fell by over 16% in April, the steepest fall since monthly records over 50 years ago.
- In Japan, GDP fell 3.4% in Q1 2020, which places the country in a technical recession following a 6.4% decline in Q4 2019.
- UK unemployment rose last month. In April, the claimant count increased by 856,500 to 2.1 million. Other ONS (Office for National Statistics) figures showed that unemployment had risen in Q1 to March, by 50,000 to 1.35 million.
- Germany and France have united in an attempt to create a €500 billion EU recovery fund. The fund would borrow the capital markets and aid EU spending.
- Bloomberg data suggests that investors believe that the probabilitly of the airline industry defaulting in the next 5 years in 100%. This is the second time in a decade that have bet on the airline industry defaulting.
- Companies who borrow more than £50m through new government-backed loans will be barred from paying dividends and cash bonuses to executives.
- The rate of inflation in the UK fell to its lowest since August 2016 as the effect of COVID-19 lockdowns was reflected in the price of goods.
- The ONS said CPI (Consumer Price Index) fell from 1.5% in February to 0.8% in March. Falling fuel prices and lower energy bills were the main contributors to this lower rate of inflation.
- Risk of a no-deal Brexit could be on the rise as Brussels and Britain continued to exchange heated words over the contentious border plans for Northern Ireland.
- According to the WTO (World Trade Organisation), international imports and exports have reached their lowest level in the last four years as global demand plummeted and supply chains faced issues. The WTO’s quarterly goods trade barometer dropped to 87.6, with any score below 100 representing a decline.
- The Hang Seng fell 3.4% as China announced that it is planning to implement a national security law into Hong Kong’s ruling charter. Mass protests are expected as the law may abolish free speech, outlaw dissent and weaken Hong Kong’s autonomy.
- China has dropped its GDP target, for the first time in history. The Chinese economy contracted by 6.8% in Q1 2020, however officials still announced a 6.6% increase to the military budget.
- India have announced a surprising interest rate cut, from 4.4% to 4%. India’s banks will also defer loan payments until August, giving businesses added recovery time.
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This article was previously published on Smith & Williamson prior to the launch of Evelyn Partners.