What mattered last week and a preview of the week ahead 8th April

What mattered last week:

  • The first week of the new quarter saw U.S. stock markets continue in the same style they finished last quarter. The S&P 500 rose over 2% for the week. The Russell 2000 outperformed to finished 2.75% higher and back above the 200-day moving average.
  • The rebound in U.S stocks, was prompted by an unexpected rebound in both Chinese and U.S manufacturing data in the early part of last week.
  • U.S stocks further buoyed by a jobs report that showed 196,000 jobs were created in March, easing fears of a U.S. slowdown after a soft jobs number in February. The unemployment rate remained stable at 3.8%, near 50-year lows.
  • The ASX 200, reflecting investor caution ahead of a looming Federal election, closed ~ 6200, for the 7th week in a row.
  • Despite lower revisions to the final March PMI’s in Europe, the DAX finished the week 4.25% higher, boosted by signs that the Chinese growth is stabilising, and the U.S. economies expansion continues.
  • AUDUSD finished another week relatively unchanged at .7100c, however AUDNZD extended two week gains to close near 1.0550, the highest weekly close in almost 12 weeks.
  • Finally, a stunning one day 20% rally in Bitcoin on Tuesday of last week. Bitcoin was highlighted last Monday in our Week Ahead video as one to watch, back when it was trading near 4100. It is currently trading above 5100.

For the week ahead, the key events are:

Australia: ANZ job advertisements (Monday), housing finance (Tuesday), Westpac consumer confidence (Wednesday).

  • Housing finance (Tuesday): The housing market in Australia remains soft and the expectation is for another decline this month in housing finance of -2.0%. However, data from the Australian Banking Association indicate that we may see a modest bounce. The risks therefore seem to be for a better than expected number.  
  • Consumer confidence (Wednesday): After the tax cuts announced last week in the Federal Budget, the risk appears to be for rebound in consumer confidence from its 98.8 print in March which was the lowest reading in the series since Sep 2017.
  • New Zealand: Business PMI (Friday).

    China: CPI and PPI (Thursday), balance of trade and FDI (Friday).

    Japan: Current account and consumer confidence (Monday), PPI and machinery orders (Wednesday).

    U.S.: Factory orders (Monday), JOLTS job openings and CPI (Wednesday), PPI and FOMC minutes (Thursday), export and import prices (Thursday).

    • CPI (Wednesday): Core CPI was soft last month, up just 0.1%. The expectation for March is for a gain of 0.2%, which would keep the year-over-year rate for core CPI at 2.1%.

    Fed speakers on the wires this week include Clarida, Williams, Powell, Bowman.

    Canada: Housing starts, building permits (Monday), new housing price index (Thursday).

    Euro Area: German balance of trade (Monday), ECB interest rate decision (Wednesday), German final CPI (Thursday), EA industrial production (Friday).

    • ECB Governing Council meeting (Wed): This month’s ECB meeting is expected to be a dull affair with no changes expected after the ECB changed its forward guidance at its last meeting. To recap, the ECB now expects interest rates to remain at their current level ‘through the end of 2019’ compared to ‘through the summer of 2019’ previously and announced a fresh round of bank liquidity measures.

    UK: Monthly GDP, industrial production and balance of trade (Wednesday), RICS House price index (Thursday).


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