Markets seen occupied with concerns of trade war between the US and China over Easter Weekend
What’s been happening?
The main news that occupied markets over the Easter weekend was that of the growing trade war concerns between the world’s two largest economies. The continual thrust and repost by China and the US in relation to tariffs is sure to damage global trade.
GBP: The UK current account last week showed an improvement on the previous figure coming in at £18.4 billion. Sterling is generally being supported in light of the potential for better than expected Brexit negotiations.
EUR: The euro has enjoyed somewhat of a rollercoaster ride in recent weeks gaining considerably on the dollar and then falling away again. The ECB have stated that monetary conditions are on course to tighten, but the main concern for the eurozone at present is whether inflation and German data will be sufficient to support the central banks plans.
USD: Good GDP data from the US last week gave dollar some wind to its sails with the YoY figure coming in at +2.9%. However, the trade war concerns are still prominent with $60 billion worth of tariffs on China due to take effect at the start of May.
What’s coming up?
GBP: Out of the UK tomorrow the market will watch Construction PMI. February’s figure saw an improvement to 51.4% from 50.2% in January. January’s figure, although expansionary, was the lowest reading in four months.
EUR: Eurozone CPI is out tomorrow with an expectation of a jump to 1.1% up from last month’s 1.0% reading. Unemployment is also expected to improve with a drop of 0.1% down to 8.5%. If the data supports, we may see another rally by EUR/USD. Market orders at some sensible levels for clients might be a consideration if clients have a target figure in mind.
USD: Friday will see the release of the Non-Farm payroll figure from the US with an expectation of 190K new jobs to be added. Any advance on this figure to above 200K could see further dollar strength. A posting circa 200K is certainly a good number, but don’t expect another monster figure seen last month where 313K new jobs were added.
The Reserve Bank of Australia (RBA) left its cash rate unchanged at 1.5% as expected. They also suggested that the economy is set to grow faster in 2018 due to strong exports and positive business climate. However, copper and iron ore prices still threaten the Aussie’s performance.