Market Update
April 19, 2021

World Growth In A Nutshell

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Thoughts Of The Week

Economic Roundup In A Nutshell

It’s been a busy week with releases around GDP growth, retail sales and inflation. In a nutshell, they are all rising. Biden’s $1.9trn stimulus package is having an immediate effect, shown by the retail sales data, which jumped almost 10%. China’s GDP data showed very healthy progress too, despite being cautious with credit growth. Remember China went into lockdown at least 3 months before the rest of the world, so we are seeing this uplift ahead of other nations. There has also been an increase in global inflation, primarily driven by energy costs.

Bond Yields Come Off The Boil

10-year bond yields dropped back this week. It’s suggested this is down to perceptions that inflation remains under control and doesn’t present a problem yet. Yields are still higher than they were a year ago though, so demand for government bonds has been strong. If yields fall further, investors benefit from price gains (given the inverse relationship between bond yields and prices). If yields rise again, investors can buy into more – and there will likely be plenty of it given the sheer size of the deficit. It was $660bn in March alone, and $1.7trn for the last six months.

The Week That Was…

On Monday, England entered phase II of its lockdown easing with shops, hairdressers, gyms and pub gardens all reopening. Footfall across all UK retail destinations jumped 218% w/w.


The EU has adopted a €800BN Covid19 recovery funding plan to be raised from this year-end to end of 2026. The EU will borrow some €150BN pa. Up to €250BN will go towards green bonds to finance environmentally beneficial projects. The raise will be done via Bills, Medium and Long-term bonds through syndications and auctions.


In the US the BEA reported March Retail sales soared to 9.8% as the fiscal payments kick in. Almost every group is above pre-crisis levels – only the restaurant and bar sector remain below pre-pandemic levels.


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