As summer is slowly drawing to an end, it has been a relatively quiet start to the week.

Monday’s (23 August 2021) PMI (Purchasing Managers’ Index) data was both positive and well-timed given all the recent media headlines talking about another global growth contraction

It has been a downbeat start to the week for global equity markets thanks to concerns that the spread of the delta variant could put a stop to the global economic recovery, especially as this week’s data releases have included disappointing US retail sales.

Investors have continued to digest last week’s strong US jobs report and updated policy guidance from the Bank of England, whilst the reaction from equity markets has remained largely muted so far this week.

With most major economic updates still to come, global equity market gains have largely been driven by company results so far this week.

Equities in both China and Hong Kong have fallen heavily so far this week as China’s President, Xi Jinping, continues to clampdown on the power of big Chinese companies.

It has been a volatile start to the week, on Monday most global equity markets continued last week’s slide, on concerns around coronavirus infection rates.

Inflation was back in focus yesterday (13 July 2021) following the release of US CPI inflation data for June. From a headline perspective, the US CPI inflation reading of 5.4%, for the year to June, came in above expectations of 4.9% and the May reading of 5%.

Although last week’s US employment data showed that the US economy is heading in the right direction, it failed to provide us with the evidence that the US economy is making sufficient progress to justify the Fed’s recent dramatic dot plot shift.

We have had an uneventful start to the week as global equity markets wait for Friday’s (2 July 2021) US employment data.