Riskier assets received a nice bump in trading last week, with a number of sectors largely green across the board. US stocks were particularly strong gainers, with the near month US30 Futures contract rallying 4.26 per cent on the week, the Nasdaq tech index rallying 7.05 per cent while the S&P500 near month future contract closed 5.11 per cent higher.
Oil closed higher for the second week in a row, with the June contract up 28.97 per cent on the week. In the currency markets, the euro and British pound slid lower against the greenback – down 1.18 per cent and 0.58 per cent respectively. Meanwhile, the overall US Dollar Index, a measure of the value of the US dollar against a basket of weighted major currencies, closed 1.17 per cent higher and spot gold was little changed.
Equity markets and commodities are clearly continuing to push higher on the idea that the worst of the coronavirus is behind us, but Friday's US non-farm payrolls report suggests otherwise. Throughout the crisis, the US jobs scenario has been a key focus for market analysts. The effects of the drag from the pile-up in job losses will no doubt have a profound effect on metrics such as retail sales, consumer spending and, ultimately, overall gross domestic product.
The weekly jobless claims report, which measures the number of unemployment benefit claims, now attracts a lot more attention as it indicates that more than 30 million Americans are out of work. While first-time filings for unemployment claims hit 3.17 million in the first week of the month, the total over the seven weeks leading up to that week hit 33.5 million. So, perhaps last week's non-farm payrolls report did not catch markets off guard and instead the reaction had already been priced in. Often considered the godfather of the US economic calendar, the payrolls report confirmed that 20.5 million Americans were out of work with the overall unemployment rate coming in at 14.7 per cent. The latest report was of particular interest as it encapsulated the full extent of the lockdown measures. The difference between these numbers and the jobless claims figures indicate that the data might have been skewed by reporting and classification issues and the overall US employment scenario is much worse.
To put things into perspective, on March 31 I wrote that to achieve record Great Depression unemployment levels the US economy would take around three months to hit 25 per cent unemployment. One month of full jobs data and we are halfway there. These data points will continue to worsen through the weeks and the recent rally could stall as we move towards the early part of June.
Another theme to re-emerge is the US-China geopolitical tensions. This was a key issue going into the end of last year, which culminated with a very welcome development when the US and China agreed to a “phase-one” deal. The pact saw the US roll back some of its existing tariffs and China agree to buying more US goods and services. However, tension appears to be bubbling up again. An escalation of finger pointing on the handling of the virus outbreak could escalate to potential future tariffs, which would severely hit global risk appetite.
This week, keep an eye on Wednesday’s UK GDP release, with the year-on-year figure expected to contract to -2.1 per cent from a previous 1.1 per cent. Quarterly the UK economy contracted by 2.5 per cent from a previous 0.0 per cent. Weekly US crude inventories, released the same day, will shed more light on the demand/supply scenario. Friday's US retail sales data, meanwhile, is expected to drop 8.6 per cent on the month.
Finally, long positions on gold, which we set a target of between $1,735 and $1,750 have not yet filled, topping out at $1,722. We will continue to hold these with $1,735 as our near-term target. While gold has been rather range bound, the safety of this asset makes it my favourite going forward.
Gaurav Kashyap is a market strategist at Equiti Global Markets. The views and opinions expressed in this article are those of the author and do not reflect the views of Equiti
MATCH INFO
Delhi Daredevils 174-4 (20 ovs)
Mumbai Indians 163 (19.3 ovs)
Delhi won the match by 11 runs
Why your domicile status is important
Your UK residence status is assessed using the statutory residence test. While your residence status – ie where you live - is assessed every year, your domicile status is assessed over your lifetime.
Your domicile of origin generally comes from your parents and if your parents were not married, then it is decided by your father. Your domicile is generally the country your father considered his permanent home when you were born.
UK residents who have their permanent home ("domicile") outside the UK may not have to pay UK tax on foreign income. For example, they do not pay tax on foreign income or gains if they are less than £2,000 in the tax year and do not transfer that gain to a UK bank account.
A UK-domiciled person, however, is liable for UK tax on their worldwide income and gains when they are resident in the UK.
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The specs: 2018 Chevrolet Trailblazer
Price, base / as tested Dh99,000 / Dh132,000
Engine 3.6L V6
Transmission: Six-speed automatic
Power 275hp @ 6,000rpm
Torque 350Nm @ 3,700rpm
Fuel economy combined 12.2L / 100km
What is the definition of an SME?
SMEs in the UAE are defined by the number of employees, annual turnover and sector. For example, a “small company” in the services industry has six to 50 employees with a turnover of more than Dh2 million up to Dh20m, while in the manufacturing industry the requirements are 10 to 100 employees with a turnover of more than Dh3m up to Dh50m, according to Dubai SME, an agency of the Department of Economic Development.
A “medium-sized company” can either have staff of 51 to 200 employees or 101 to 250 employees, and a turnover less than or equal to Dh200m or Dh250m, again depending on whether the business is in the trading, manufacturing or services sectors.
How tumultuous protests grew
- A fuel tax protest by French drivers appealed to wider anti-government sentiment
- Unlike previous French demonstrations there was no trade union or organised movement involved
- Demonstrators responded to online petitions and flooded squares to block traffic
- At its height there were almost 300,000 on the streets in support
- Named after the high visibility jackets that drivers must keep in cars
- Clashes soon turned violent as thousands fought with police at cordons
- An estimated two dozen people lost eyes and many others were admitted to hospital
Killing of Qassem Suleimani
MATCH INFO
England 19 (Try: Tuilagi; Cons: Farrell; Pens: Ford (4)
New Zealand 7 (Try: Savea; Con: Mo'unga)
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A little about CVRL
Founded in 1985 by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, the Central Veterinary Research Laboratory (CVRL) is a government diagnostic centre that provides testing and research facilities to the UAE and neighbouring countries.
One of its main goals is to provide permanent treatment solutions for veterinary related diseases.
The taxidermy centre was established 12 years ago and is headed by Dr Ulrich Wernery.
Match info
Champions League quarter-final, first leg
Liverpool v Porto, Tuesday, 11pm (UAE)
Matches can be watched on BeIN Sports
It Was Just an Accident
Director: Jafar Panahi
Stars: Vahid Mobasseri, Mariam Afshari, Ebrahim Azizi, Hadis Pakbaten, Majid Panahi, Mohamad Ali Elyasmehr
Rating: 4/5
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
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The flights: South African Airways flies from Dubai International Airport with a stop in Johannesburg, with prices starting from around Dh4,000 return. Emirates can get you there with a stop in Lusaka from around Dh4,600 return.
The details: Visas are available for 247 Zambian kwacha or US$20 (Dh73) per person on arrival at Livingstone Airport. Single entry into Victoria Falls for international visitors costs 371 kwacha or $30 (Dh110). Microlight flights are available through Batoka Sky, with 15-minute flights costing 2,265 kwacha (Dh680).
Accommodation: The Royal Livingstone Victoria Falls Hotel by Anantara is an ideal place to stay, within walking distance of the falls and right on the Zambezi River. Rooms here start from 6,635 kwacha (Dh2,398) per night, including breakfast, taxes and Wi-Fi. Water arrivals cost from 587 kwacha (Dh212) per person.
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TUESDAY'S ORDER OF PLAY
Centre Court
Starting at 2pm:
Elina Svitolina (UKR) [3] v Jennifer Brady (USA)
Anastasia Pavlyuchenkova (RUS) v Belinda Bencic (SUI [4]
Not before 7pm:
Sofia Kenin (USA) [5] v Elena Rybakina (KAZ)
Maria Sakkari (GRE) v Aryna Sabalenka (BLR) [7]
Court One
Starting at midday:
Karolina Muchova (CZE) v Katerina Siniakova (CZE)
Kristina Mladenovic (FRA) v Aliaksandra Sasnovich (BLR)
Veronika Kudermetova (RUS) v Dayana Yastermska (UKR)
Petra Martic (CRO) [8] v Su-Wei Hsieh (TPE)
Sorana Cirstea (ROU) v Anett Kontaveit (EST)
