US-China tension continued to escalate last week. On Wednesday July 22, US ordered China to close its consulate in Houston, citing spying concerns. In retaliation on Friday July 24, China ordered the closure of US consulate in Chengdu, condemning US of its unjust actions.

On Thursday July 23, the US initial jobless claims data was published, showing an increase of 1,416,000 in the number of people filing for unemployment benefits in the week ending July 17, marking the first rise since March, and mainly affected by areas with climbing coronavirus infections.

On Tuesday July 21, EU leaders approved the €750 billion recovery fund in detail after 4 days of negotiation. However, the size of grant was cut to €390 billion from €500 billion while the available loan was adjusted up to €360 billion.

Eurozone Markit Composite PMI for July was released on Friday 24 July, standing at 54.8, beating the market expectation of 51.1, reaching the highest level since June 2019. US Manufacturing and Services PMIs were also published last week, which however missed market estimates, reading at 51.3 and 49.6 respectively.

  Eurozone GDP growth will be released on Friday July 31, at an expected rate of -4.3% YoY.

Eurozone CPI for July will also be announced on Friday July 31, with an expectation of 0.4% YoY.

-0.47*

-1.0     A score of -1.0 indicates an extremely poor economic outlook, which is accompanied by a high probability of negative returns in risky asset classes like equities. The Risk Barometer tilts our portfolios away from equities during such periods.

0.0       A score of 0 indicates a neutral economic outlook with almost equal probability of positive and negative returns in risky asset classes like equities. The Risk Barometer maintains a balance between equities and other asset classes during such periods.

+1.0   A score of +1.0 indicates an extremely positive economic outlook, which is accompanied by a high probability of positive returns in risky asset classes like equities. The Risk Barometer tilts our portfolios towards equities during such periods.

*as at latest realignment 20/07/20

Notice:

The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated, but is not an indicator of potential maximum loss for other periods or in the future.