Global Markets Update – Monday 29 March 2021

Container Ship - Global Trade

The Ever Given, one of the world’s largest container ships, which ran aground and blocked the Suez Canal, has finally been refloated after best efforts to free the ship had failed, meaning a key global trade route remained blocked, holding up an estimated £7 billion of goods per day.


The FTSE 100 advanced 0.5% over the week.

The UK inflation rate fell to a weaker-than-expected 0.4% in February, down from 0.7% in January, due to lower clothing prices.

The flash estimate of the Cips/IHS Markit purchasing managers’ index of service sector activity soared to seven-month high of 56.6 in March, indicating that the sector was outpacing manufacturing (which rose to a three-month high of 55.6) for the first time since the start of the pandemic. Advance orders ahead of the easing of the lockdown in April drove the surge.

Retail sales rose 2.1% in February, partly reversing January’s 8.2% drop. While clothing sales remain moribund, outdoor furniture and DIY sales were strong. However, retail sales are still down 3.7% on their pre-pandemic levels.

The EU and UK appear to have reached a deal on how to co-operate in shaping rules for banks and financial markets. This is a key step needed before Brussels will consider further market-access rights for the City of London. However, hopes tare fading that the two sides will reach a broad agreement on supervisory “equivalence” as the UK has begun to diverge in the way it oversees financial markets.


The S&P 500 gained 0.5% over the week, while the tech-heavy Nasdaq slid 1.4%.

Several shares sold off sharply after a mysterious seller dumped almost $19 billion worth of stock. The sales were concentrated in several Chinese technology companies and US media groups, including ViacomCBS which halved in value over the week. This follows a three-month period of unusual trading in ViacomCBS and Discovery. Shares of both companies had been among the best performers in the US market, having rallied more than 150% between the end of 2020 and the start of the week.

Joe Biden doubled his target for US vaccine rollouts. The president is now targeting 200 million jabs in his first 100 days in office.

The Federal Reserve said that it would lift restrictions on share buy-backs and dividend payments for most US banks from 30 June 2021.

US jobless claims fell to their lowest level since the pandemic began.

The flash reading of March’s IHS Markit purchasing managers’ index for the services sector hit an 80-month high of 60.


The FTSEurofirst 300 rose 0.8% over the week. Surging COVID-19 cases across the continent have led to doubts over the viability of this summer’s holiday season, sending airline and other travel shares tumbling.

The political tensions of the lack of COVID-19 vaccines stepped up several notches. In a two-day meeting, the European Commission discussed banning vaccine exports. France supported a full ban, while Netherlands and Belgium were among countries that highlighted the damage such measures may cause to supply chains. In the end, the European Commission decided to widen the basis for stopping shipments of Covid-19 vaccines to countries that import from the EU but refuse to export their own vaccine production. The EU and UK also issued a statement, saying they would work together to find a “win-Win” solution.

Germany’s highest court stopped a law ratifying the EU’s post-pandemic €750bn recovery fund which allows the EU to raise funds on financial markets and distribute them to member states. While Bundestag passed the proposals, certain elements have raised concerns, saying that EU treaties do not allow the bloc to take on debt.

The flash estimate of the eurozone IHS Markit composite purchasing managers’ index returned to growth for the first time since the autumn of 2020, rising to 52.5, from 48.8 in February. Manufacturing activity soared to a record high of 62.4, up from 57.9 in February. Service sector activity also improved to 48.8 in March, compared to 45.7 the previous month. While the sector continued to contract, decline was the weakest since last August.

German chancellor Angela Merkel reversed course on a contentious Easter shutdown, but extended restrictions until mid-April. Italy also announced stricter curbs over Easter, while Spain flirted with the idea of a four-day week to control the virus’ spread.


The Nikkei 225 dropped 2.1% over the week.

Pacific Basin

China’s stock market slumped amid expectations of tighter monetary policy due to the country’s success in recovering from the pandemic. In particular, tech stocks were hit by growing concerns of possible de-listings from US exchanges and reported plans by Beijing to take control of companies’ user data.

Emerging Markets

Mexican President Andrés Manuel López Obrador revealed plans to allow the government to suspend permits for fuel and oil imports and exports, storage and distribution granted to private companies and give state oil company Pemex more control.

India, a key vaccine maker for many countries, moved to temporarily block vaccine exports while it expands its inoculation rollout to citizens aged 45 and above in the face of rising domestic cases.

Turkey’s financial markets tumbled after President Recep Tayyip Erdogan sacked the country’s central bank governor.


The yield on the 10-year US Treasury bond closed the week at 1.66%, while the 10-year German Bund ended at -0.35%.

US junk bond issuance has reached $140bn this quarter, surpassing the previous record in the second quarter of 2020. Royal Caribbean, Nieman Marcus, Cinemark and American Airlines are among those that have secured additional funding.


After a weak few days, oil prices rallied on news that oil supplies may be interrupted as a result of the temporary closure of the Suez Canal. Brent crude ended the week just below $65 a barrel.

Please email us if you would like to receive our weekly newsletter direct to your inbox.

Image by Alexander Kliem from Pixabay