BUSINESS RESEARCH AND insights

US Q2 GDP was the data release to watch overnight and while the print missed expectations, a healthier US consumer that seemingly can’t get enough was the bright spot and carried the day.

After a wobble early last week, equity markets have resumed their upwards trajectory.

Very strong SME business conditions in Q2.

Consumption is down almost 7% compared to the start of 2021.

Lower currency continues to buoy Australian agriculture.

A couple of comments from the Fed chair during the post-FOMC meeting Statement have been responsible for most of the market price action, notably, Powell’s remarks “we’re some ways away from substantial progress on jobs” and that “the Fed is nowhere near considering raising rates”.

Wellbeing up & now at its highest level since 2019. Resilience is building, but wellbeing is falling for the unemployed & low income earners. NSW lockdown a key risk.

For the first time, we are now seeing contagion from the sell-off in Hong Kong and US-listed Chinese shares, to global markets – the NASDAQ in particular, ending the day down 1.2% in front of the earnings results from Apple, Alphabet and Microsoft.

After an initial hint of contagion, European and US equities looked past Asian concerns over China’s regulatory crackdown, closing the day with modest gains at or near record highs. Meanwhile the real story in the rates markets has been the record move decline in the 10y US real rate.