Weekly Market Review - April 15-19
This week, the US currency was the best performer, adding 0.49% against the euro, to 1.1246, and gaining 0.66% against the British pound, to 1.2993. Japanese yen has moved in a bullish trend while its economy showed disappointing results, with imports and exports falling more than expected. USD/JPY slightly fell 0.08% for the week.
In the US, stock indicators S&P 500 slightly declined while NASDAQ and Dow Jones increased by about 1% each.
Here are the most important economic figures released this week:
Japanese Manufacturer’s Confidence Worries Economists
Japanese manufacturer’s business confidence fell this month to the lowest level in two-and-a-half years, according to a Reuters poll, which tracks the Japanese tankan quarterly survey. The index, combined with other indicators, adds to concerns that the economy might get into a recession amid weaker foreign demand. The Reuters poll, which involved 478 large and mid-sized companies, showed that almost half of the firms are worried about China's GDP slowdown and its trade war with the US.
US Trade Deficit Narrowed
The US trade deficit contracted in February to the lowest level in eight months amid declining imports from China, which encourages President Donald Trump’s “America First” rhetoric. On Wednesday, the Commerce Department said that the trade gap narrowed 3.4% to $49.4 billion in February, the lowest since June of last year. Analysts expected a widening to $53.5 billion. The trade deficit contraction was driven by aircraft exports.
UK Salaries Higher Amid Brexit Talks
The average wage in the UK has shown the biggest growth in more than ten years as companies continue to hire more workers. The move suggests that Brexit-related worries are pushing firms to rely on employees rather than on longer-term investments. Thus, total wages, including bonuses, rose 3.5% in the first quarter of 2019 year-on-year, in line with economists’ forecasts. Employment rose 179,000 for the quarter, also in line with expectations.
German Economic Sentiment is Finally Up
It seems that the German economy is starting to recover, as the confidence index by ZEW rose this month for the first time in almost a year. Thus, the economic sentiment increased to 3.1 from -3.6 recorded last month, which is above analysts’ forecasts and the first time in 13 months when the index shows a positive reading. ING economist Carsten Brzeski believes that the upward movement was driven including by the European Central Bank’s stimulus programme.
US Jobless Claims Fell 5,000 Last Week
The number of US citizens applying for unemployment benefits declined to the lowest level in over 49 years last week, suggesting steady support in the domestic economy. On Thursday, the Labor Department said that initial jobless claims fell last week by 5,000 to a seasonally adjusted 192,000, the lowest since 1969. Economists expected the indicator to rise to 205,000, but it fell for the fifth straight week. The four-week moving average of initial claims, a more accurate figure, fell 6,000 to 201,250.
US Housing Starts And Building Permits Decline in March
US housing starts fell close to two-year lows last month, driven by the constant exhaustion in the single-family housing sector. The housing market doesn’t revive even amid lower mortgage rates. On Friday, the Commerce Department revealed that housing starts had declined by 0.3% to 1.139 million in March, which is the lowest level since May 2017. Analysts expected an increase of 1.230 million. Building permits fell 1.7% to 1.269 million last month, the weakest in five months.
Upcoming News to Watch
Next week markets in the UK, Australia, New Zealand, Germany, Italy, Spain, Hong Kong, and other countries will be closed on Monday for the second day of the Easter holiday.
On Tuesday, Australia will report on its inflation while on Thursday it will present the producer price index (PPI) along with imports and exports.
On Friday, the US dollar might become volatile as the US will report on its quarterly GDP growth.
Anatol has been writing for our news site for a year and is the newest member of our team. While he’s new to us, he’s certainly not new to trading with over 10 years’ experience being a professional financial journalist and working in the markets. Learn more.