Global markets bounced back from the prior week’s weakness as strong economic data on both sides of the Atlantic boosted investor sentiment. Second quarter GDP in the US received a modest upgrade on the back of stronger consumer spending and exports whilst in the Eurozone, flash PMI data for August remained at elevated levels. The US housing sector also received a boost in the form of higher sales ticking higher as new inventory entered the market.
Energy stocks were amongst the big movers on the back of higher oil prices. The commodity heavy FTSE100 in the UK added +0.9% with the mid-cap centric FTSE250 rising by +1.3%. In the US, the S&P500 gained by +1.5% with further support coming from the FDA’s full approval of the Pfizer-BioNTech vaccine. With the Eurozone economy remaining in expansion mode, the French CAC40 and German DAX30 rose by +0.8% and +0.3% respectively. Meanwhile in Japan, the Nikkei 225 closed the week +2.3% higher, ignoring signs of weaker output in the Services sector. That was despite state of emergency measures being extended to a further 8 prefectures as COVID cases continued to rise.
Sovereign bond markets took lead from their equity counterparts with yields pushing higher in both the US and Europe. With investors adopting a more risk-on attitude, sovereign bonds sold off with the 10-year US treasury yield rising by 5 basis points (bps) to 1.29%. The equivalent UK gilt yield increased by 6bps to 0.58% whilst on the Continent, the EU 10-year index rose by 8bps although it remained firmly entrenched in negative territory at -0.46%.
In the commodity markets, oil prices rallied despite concerns that resurging COVID cases in the US and many parts of the world could dampen demand. Brent crude jumped to $72.70 a barrel, a weekly increase of +11.5%. Elsewhere, the gold price benefited from some weakness in the US dollar with the precious metal rising by +1.4% to $1,808 an ounce. Copper also concluded the week in positive territory after a +4.2% to $9,424 a tonne.
Friday’s Labour Market Report is the standout macro data release from the US this week with the unemployment rate expected to fall by 20bps to 5.2% and 750,000 further jobs created during August. In the UK, final PMI’s for both the manufacturing and services sectors are released throughout the week. The Bank of England has already published its monthly consumer borrowing statistics covering July with individuals repaying more than £1.4bn of debt during the month.
It’s a busy week of headline data for the Eurozone with unemployment, CPI (both headline and core) and retail sales all due. Final PMI’s and several key country specific figures including French GDP are also worth keeping an eye on. Moving to Asia, Japan has already published its retail sales and unemployment figures with both exceeding analyst expectations. Official PMI’s have also already been released in China with the manufacturing sector slipping back into contractionary territory. Media group Caixin publishes its equivalent manufacturing PMI on Wednesday. 
Read last week's market update
 Bureau of Economic Analysis - 26.08.21
 T. Rowe Price - 27.08.21
 Forex Factory - 29.08.21
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