Market Action

• Thanks to a strong rally following the April jobs report U.S. markets were able to recover from their grizzly performance earlier in the week. Bonds also sold off, pushing yields higher and fueling the Financials sector’s leadership for the week.
• The rebound in employment gains for April brought relief to markets after last week’s poor GDP numbers. Regardless, some analysts are positing that the economy is facing structural impediments for accelerating growth.
• British markets and the pound posted strong gains on Friday after the shocking election results, which will see David Cameron return as Prime Minister.
• China’s markets had one of their worst performances of 2015 this week. PMI data released on Monday was weak and remained below expansionary levels. Further restrictions on margin balances also contributed to their markets’ decline.
• The European Commission raised its growth estimate for the year this week. A slew of indicators from loan growth to PMI data have turned upwards on the Continent.
• The IMF stated that Greece’s creditors should not maintain such a hardline position with the small economy and consider whether a haircut is warranted. The remark came as a surprise, driving a wedge between the Fund and European creditors. The ECB raised its limit on ELA aid to Greece once again this week.
• The IMF also released a report on Monday referring to China’s yuan as approaching fair-value. The language, wearing a diplomatic cloak, continues momentum for China’s desire to grow as a reserve currency.
• Australia cut its interest rate again this week. The island economy is trying to restructure away from reliance on mining and commodities in the wake of weak global demand.

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