Weekly Global Market Update: May 11-15


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Globally, the markets were cautious last week due to the likely collapse of phase 1 trade agreement between the US and China But, reports suggest that the meeting between officials of both countries was positive. Over the weekend China said it would continue to stimulate its economy to support its recovery from the pandemic. This week Investors will likely keep a look at the economic releases which includes RBNZ rate decision, UK GDP; US retail sales, Australia employment figures, Eurozone industrial production etc.

Last week

  • The U.S. economy lost 20.5 million jobs in April and the unemployment rate soared to 14.7% — both record highs.
  • Initial jobless claims reported 3.169M were better than the prior 3.846M but worse than expectations of 2.900M.
  • ADP private employment declined 20.236M in April versus 149K in March.
  • The UK construction PMI slumps to the record low of 8.2 in April vs. 22 expected, prior to 39.3. The data marked the lowest reading since April 1997.
  • Bank of England (BOE) leaves the benchmark interest rate unchanged at 0.10%.
  • Lyft the ride-hailing company reported better than expected Q1 #earnings. $LYFT shares rose 15% after-hours trading.
  • RBA leaves rates on hold at 0.25% after previously cutting rates on March 3 and March 19.
Stock Market

Stocks erased early gains and pointed to a negative start on Monday amid concerns about a second wave of COVID-19 infections after China, South Korea and Germany saw a rise in new cases. Northeast China and South Korea are seeing battling a second virus wave, with Mainland China has reported 17 new cases on Monday. Meanwhile, Italy, France and the UK all reported the fewest COVID-19 deaths since March. The US equities closed last week on a positive note. The Dow rallied 1.91%, as S&P500 (+1.69%) and NASDAQ (+1.58%) recorded decent gains.

Wall Street opened lower on Monday and the Dow Jones trading 0.9% lower.

Companies due to release their results will be, Under Armour, Marriott International, and Cisco Systems will be among those reporting earnings this week.

In the currencies market, the US dollar remains the King. The Dollar continued to appreciate to above 100 after falling nearly 1% on Friday. GBP fell on Monday after Prime Minister Boris Johnson is expected to provide further details on the easing of coronavirus lockdown measures in Britain after his statement during the weekend prompted confusion across the country. The main important events watch for GBP traders this week, GDP numbers for the 1st quarter and retail sales. EUR/USD trading slightly weaker on Monday and the main attractions for Euro this week will be Eurozone Industrial Production & GDP.

Australian dollar retreated from two weeks high 0.6560 to 0.6470 after the rumours about China expected to announce tariff on some Australian agriculture products. Now investors waiting for Thursday employment figures as the economy are expected to shed 575K jobs in April, marking the biggest decline since the data series began in 1978. While for NZD traders the focus now shifts to the latest RBNZ monetary policy update on Wednesday.

Gold trading steady above $1700 on Monday as the health authorities in China and South Korea warned that a new wave of infections could be starting across both countries. On Friday the yellow metal dropped by almost 1.1% after better than expected employment data from the United States. Overall technically the trend for gold is still considered as bullish because the price holding well above $1700 and the next important resistance to watch $1750. On the other side, $1680 is likely to remain a crucial support zone.

Crude oil prices started this week with a positive note after Saudi energy ministry said it had asked the kingdom's oil giant Saudi Aramco to cut its crude production for June by an extra amount of one million barrels a day, on top of the reduction already announced under the latest OPEC+ deal. This week the investors continue to follow the new updates from the US and China trade talks and Wednesday oil inventory report.