What mattered last week and a preview of the week ahead 1st April

What mattered last week:

• U.S. stock markets finished the week and the quarter strongly. The S&P 500 rising 1.15% for the week and almost 13% for the quarter.
• The ASX 200, finished the week unchanged, however it registered a gain of almost 10% for the quarter, with the large cap miners the drivers of the rally.
• The rebound in stocks, following the large fall in the last quarter of 2018, the result of the Federal Reserve along with other key central banks adopting a more dovish bias and underpinned by hopes of a U.S. - China trade deal.
• Stocks have ignored the inversion of the U.S. yield curve (where long-term interest rates have fallen below short-term interest rates) which has often been a good leading indicator of recession.
• The soft March PMI’s in Europe, along with talk within the ECB about the possibility of moving to a tiered deposit rate, has resulted in the EURUSD falling back towards range lows, 1.1200 area.
• In New Zealand, the RBNZ moved towards the start of an easing cycle, with the NZ interest rate market now priced for 40bps of cuts over the next 12 months.
• The AUDUSD finished another week relatively unchanged at .7095, defying the trend of a stronger U.S. dollar across the board.

For the week ahead, the key events are:

Australia: HIA new home sales, NAB business confidence (Monday), building approvals, RBA interest rate meeting and Federal Budget (Tuesday), retail sales and balance of trade (Wednesday).

• RBA meeting (Tuesday): The RBA is expected to keep the cash rate on hold at 1.50%, after receiving comfort from a fall in the unemployment rate to 4.9% in February and a desire to see the extent of fiscal stimulus announced in Tuesday nights Federal budget.
• Retail sales (Wednesday): In recent months, retail sales have been soft, with December retails sales falling -0.4% and a slight rebound in January of +0.1%. The market is expecting a gain of 0.2% m/m for February.

New Zealand: NZIER Business confidence (Tuesday), global diary trade auction (Wednesday).

China: Caixin manufacturing (Monday) and services PMI (Wednesday).

Japan: Tankan business conditions survey (Monday), services PMI (Wednesday), leading economic index (Friday).

U.S.: Retail sales (Monday), ISM manufacturing, construction spending, business inventories and durable goods (Tuesday), ISM non-manufacturing (Thursday), employment (Friday).

• ISM (Monday): In February, the ISM manufacturing index dropped to a two-year low of 54.2. The market is looking for a slight rebound back to 54.5 in March.
• Employment (Friday): After nonfarm payroll growth slowed to just 20,000 in February, due to the government shutdown, the market is expecting a bounce back in March, of 170,000 jobs. The unemployment rate is expected to remain at 3.8%.

Fed speakers on the wires includes Bostic, Kashkari and Mester.

Canada: RBC manufacturing PMI (Tuesday), Ivey PMI and employment (Friday).

Euro Area: EA inflation flash (Monday), EA employment (Tuesday), EA retail sales (Wednesday), German factory orders (Thursday), German industrial production (Friday).

• EA employment (Tuesday): The labour market has been a shining spot for the ECB, defying the slowdown in the wider economy. The unemployment rate is expected to remain at a 10 year low of 7.8% in February.

UK: Markit/CIPS manufacturing PMI (Monday), construction (Tuesday). Markit/CIPS services (Wednesday), Halifax house price index PMI (Friday).

Disclaimer

TECH-FX TRADING PTY LTD (ACN 617 797 645) is an Authorised Representative (001255203) of JB Alpha Ltd (ABN 76 131 376 415) which holds an Australian Financial Services Licence (AFSL no. 327075)

Trading foreign exchange, futures and CFDs on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange, futures or CFDs you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss in excess of your deposited funds and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange, futures and CFD trading, and seek advice from an independent financial advisor if you have any doubts. It is important to note that past performance is not a reliable indicator of future performance.

Any advice provided is general advice only. It is important to note that:

• The advice has been prepared without taking into account the client’s objectives, financial situation or needs.
• The client should therefore consider the appropriateness of the advice, in light of their own objectives, financial situation or needs, before following the advice.
• If the advice relates to the acquisition or possible acquisition of a particular financial product, the client should obtain a copy of, and consider, the PDS for that product before making any decision.