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Weekly financial market overview 10.08.-16.08.

News - August 17, 2020



Konstantins Goluzins, CFA

Head of Asset Management
Phone.: (+371) 6700 0456
E-mail: trust@bib.eu


Main events of the previous week

The UK economy contracted a record 20.4% in the second quarter, when the strongest coronavirus restrictions were in place. The contraction was a record for the largest economies in the world, also the largest drop in UK quarterly GDP on record. The data also showed that the world's sixth largest economy entered a recession, contracting for the second consecutive quarter. There were signs of recovery in June, with GDP rising 8.7% from May, while analysts expected 8% growth on average, according to the National Statistics Office.

Economic data

US. The consumer price index in July increased by 0.6% versus June, while the annual inflation rate was 1%. The growth of the core inflation rate, excluding food and energy, amounted to 1.6% y/y in July.

Retail sales rose 1.2% in July compared to June, while retail sales were expected to grow by 2%. In turn, excluding data on gasoline and car sales, retail sales in July rose by 1.9% for the same period.

Industrial production in July increased by 3% versus June. In turn, in July, the drop in industrial production volumes compared to July 2019 was 8.2%.

The number of initial jobless claims for the week was registered in the amount of 963 thousand, which is 236 thousand less than week before and 197 thousand less than predicted by analysts. This figure fell below a million for the first time since the start of the pandemic.

Eurozone. After an increase of 12.3% in May, the volume of industrial production in June rose by another 9.1% against May. In turn, in June, the drop in industrial production compared to June 2019 was 12.3%.

China. The consumer price index in July rose by 0.6% versus June, while the annual inflation rate was 2.7%.

Retail sales declined 1.1% in July on an annualized basis, which is seventh straight month that retail sales declined from the previous year.

In turn, the volume of industrial production in July increased by 4%.

Key events this week

  • Brexit negotiations between the UK and the EU will resume this week, and the US and Eurozone central banks will publish their minutes from their July meetings.
  • On Wednesday, the eurozone will report on the inflation in July, and the US will know the change in oil reserves for the week.
  • On Thursday, the US will publish the number of initial jobless claims for the week.
  • On Friday, the level of business activity in August will be announced in the eurozone and in the US.

The information provided herewith has an informative nature. This information cannot be regarded as an offer or recommendation for purchase, storage or sale of securities, or as an investment recommendation, an investment survey or a consultation on investments, or a recommendation to entrust management of your assets to the specific investment manager. The Client is fully aware and undertakes all risks involved in the investment. This information is prepared by AS Baltic International Bank.

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