Investment markets and key developments over the past week
The past week was volatile as investment markets reacted to China’s move to devalue the renminbi and make its determination more market oriented. The associated uncertainty saw shares, commodities, emerging market currencies and the $A fall. It was a bit like investors thinking “we don’t know what’s happening so we better sell”. Once the dust settled and investors came to the view that a large decline in the renminbi was unlikely, there was a bounce back or at least a bit of stabilisation. This left Eurozone shares down 3.4%, Japanese shares down 1% and Australian shares down 2.2% with local profit results not helping, but US shares rose 0.7% and Chinese shares gained 5.9% as they would be beneficiaries of the lower renminbi. Bond yields rose marginally. Commodity prices were mixed with oil falling to a new low for the year on ongoing oversupply concerns. China related uncertainty also weighed on the $A a bit. Read our weekly market wrap here: (VIEW LINK)
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