| US equities closed at record highs on Friday, with major stock benchmarks booking weekly gains of around 1%. The record finishes for the Dow and S&P 500 came after investors digested a fresh employment report for July from the U.S. Labor Department that saw a better-than-expected 943,000 jobs created and the unemployment rate fall to 5.4% from 5.9%. The gain in new jobs exceeded what was seen in June and offers some hope that the stalled employment recovery is regaining some momentum.
Ireland’s vaccination programme overtakes UK
The latest data for July 7th show Ireland has now fully vaccinated 58.75% of its population, above the comparable UK figure of 57.8%. High take-up rates, especially for younger age groups, mean that Ireland’s vaccination rates will continue moving higher than its peers. Currently, 69.2% of the population have had a first vaccination dose, in line with the UK, but Ireland should move ahead once figures for Sunday July 8th are released. Health officials have indicated that the success of the vaccination programme will allow restrictions to be eased.
GDP to expand by 10% in 2021, domestic sectors by 5%
This morning we have published our new forecasts for Irish GDP to expand by 10% in 2021 and 5.6% in 2022. The upward revision largely reflects the buoyant export and multinational sectors, seemingly impervious to any COVID-19 related disruption. However, the latest data show the 8.7% contraction in the indigenous domestic economy in 2020 and 1.2% fall in Q1 2021 were smaller than feared. Clearly, a sharp rebound in activity is now underway. We now see a faster rebound in domestic indigenous output, 5.2% in 2021 versus 2.7% previously.
Short-term indicators uniformly point to rapid rebound
Last week’s Purchasing Manager Indices for July, composite 65.0, indicated activity is now expanding at its fastest pace on record. Pandemic Unemployment Payment (PUP) claims have now fallen by two-thirds since February to 163,000, illustrating a strong rebound in employment. Also in July, VAT receipts were up over 50% on the year, reflecting the retail sector re-opening from mid-May, with credit/debit card spending up 12% on the same month of 2020. So, it is clear that an exceptionally rapid rebound is now underway in the domestic economy.
Markets in numbers
| Equity Markets (Local) |
Level |
1 Day % |
Month to |
Quarter to |
Year to |
1 Year |
| |
|
|
Date % |
Date % |
Date % |
Ago % |
| |
|
|
|
|
|
|
| Euro Stoxx 50 |
4,178 |
0.32% |
2.1% |
2.9% |
19.9% |
32.0% |
| Ireland |
8,497 |
0.64% |
2.1% |
4.0% |
16.1% |
38.0% |
| UK |
7,123 |
0.04% |
1.4% |
1.5% |
12.5% |
22.1% |
| France |
6,818 |
0.53% |
3.1% |
4.8% |
25.2% |
42.8% |
| Germany |
15,750 |
0.11% |
1.4% |
1.5% |
14.9% |
25.2% |
| |
|
|
|
|
|
|
| MSCI World |
3,098 |
-0.13% |
1.0% |
2.8% |
16.5% |
33.8% |
| S&P 500 |
4,437 |
0.18% |
1.0% |
3.4% |
19.1% |
34.5% |
| Nasdaq |
14,836 |
-0.38% |
1.1% |
2.3% |
15.6% |
34.6% |
| Hang Seng |
26,276 |
-0.10% |
0.8% |
-8.8% |
-2.0% |
7.8% |
| Nikkei 225 |
27,820 |
0.33% |
2.0% |
-3.4% |
2.2% |
26.1% |
| |
|
|
|
|
|
|
| Currencies/Bond Yields |
Level |
Level 1 |
Level Last |
Level Last |
Level Last |
Level 1 |
| Commodities |
|
Day Ago |
Month End |
Qtr End |
Yr End |
Year Ago |
| |
|
|
|
|
|
|
| Stg/EUR |
0.8483 |
0.8479 |
0.8537 |
0.8572 |
0.8937 |
0.8979 |
| USD/EUR |
1.1753 |
1.1762 |
1.1870 |
1.1858 |
1.2216 |
1.1738 |
| USD/Stg |
0.7218 |
0.7208 |
0.7193 |
0.7229 |
0.7318 |
0.7650 |
| |
|
|
|
|
|
|
| Ireland 10 Yr Bond |
-0.06 |
-0.06 |
-0.06 |
0.16 |
-0.30 |
-0.14 |
| German 10 Yr Bond |
-0.46 |
-0.46 |
-0.46 |
-0.21 |
-0.57 |
-0.51 |
| UK 10 Yr Bond |
0.61 |
0.61 |
0.57 |
0.72 |
0.20 |
0.14 |
| US 10 Yr Bond |
1.30 |
1.30 |
1.22 |
1.47 |
0.91 |
0.56 |
| |
|
|
|
|
|
|
| Oil – Brent ($) |
68 |
71 |
76 |
75 |
52 |
44 |
| Gold Futures ($) |
1760 |
1760 |
1813 |
1772 |
1895 |
2010 |
Source: Bloomberg
|
