Daily Commentary BY THE CURVE TEAM –

Virus Fears Return

29th June 2020

Markets are getting jittery as fears over the spread of the virus intensify.

As cases rise dramatically in the US and the small Victorian outbreak sends shoppers back to the toilet paper isle, concern over the outlook has returned to markets. Domestically, despite a relatively small outbreak in outer Melbourne, levels of the virus are holding steady and low and lockdown measures are still set to roll back further in the coming days and weeks.

However, the same cannot be said for our allies across the pacific. Cases in the US are rising dramatically all but giving up any gains of their lockdown measures, globally cases number surpassed a grim milestone of 10 million cases and 500K deaths.

Sentiment around the virus outlook is set once again to be a key factor in market this week, with many commentators alluding to higher levels of volatility in asset prices over the short term. Data wise there are a few key element that may move markets this week.

Tuesday will see both ABS payroll data and a speech by RBA Deputy Governor Guy Debelle.  He will speak on a webinar for Economic Society of Australia titled “the Reserve Bank’s policy actions and balance sheet”. Whilst much of the statements from the RBA lately have been somewhat unremarkable it will certainly interesting to hear their official view on key item like the uptake in the term funding facility.

Later this week we will get data for the Trade Balance on Thursday before retail sales out Friday.

Government wise there have been murmurs that we will get little in the way of announcement this week ahead of the Eden-Monaro by-election. Reports indicate the coalition riding high on a Scott Morrison’s current approval rating are loathed to rock the boat with any key announcements around Jobkeeper or Jobseeker until next week.

Matthew Dunshea

Client Relationship Manager