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.

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”.

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.

Strong earnings continue to outweigh Delta concerns with the S&P500 reaching a new record high, So far 87% of companies reporting have beaten expectations and if maintained would be the strongest earnings beat since 2008.

Monday’s delta blues are once again talking back-seat in driving markets, the winning streak in the major US stock indices extending to a third day as incoming quarterly earnings reports for the most part continue to beat expectations, the S&P500 closing within 0.4% of last Mondays record high.

Strong earnings have swept away Delta concerns in the US with 85% of companies reporting so far beating expectations.

The Delta variant continues to spread, vaccination rates have slowed, and case numbers are rising.

There’s more caution in the markets today, even though numbers out of Australia, the US and China were better than expected. There’s a bit of battle fatigue hitting the market says NAB’s David de Garis.

There are now less than two unemployed people for every job vacancy in Australia, a record low for this ratio.

Following a positive lead from Asia, US and EU equities have kick started the new week with a positive tone.

A swift turnaround in market sentiment on Friday. NAB’s Ray Attrill provides some of the reasons.

The ECB’S new strategy has driven the Euro higher in a market which has generally been driven down by COVID concerns. NAB’s David de Garis explains what’s changed in the ECB’s 2% inflation target.

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