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Author: Anatol Antonovici
Senior Reporter
Anatol Antonovici

Weekly Market Review - July 15-19

This week, the US stock market has departed from its record highs as US President Donald Trump warned that he could add more tariffs to Chinese goods if he wanted to. However, it seems that the two largest economies of the world might reach a compromise.

In the foreign exchange market, Japanese yen and Swiss franc enjoyed their safe-haven asset status amid the trade tensions. Both currencies added 0.18% against the US dollar.

In the cryptocurrency market, Bitcoin has declined by over 11% on bearish news from the US government. Treasury Secretary Steven Mnuchin expressed his concerns over Bitcoin and Facebook’s Libra. Currently, BTC is trading below $10,400.

Macroeconomic News

Japan’s Inflation Growth Slows

Japan’s core inflation index showed the largest deceleration in about two years last month. The report might put pressure on the Bank of Japan to deploy more stimulus by the end of July. On Thursday, the Japanese government said that the consumer price index (CPI) had increased by 0.6% in June compared to the same period in 2018, in line with analysts’ expectations. The core-core CPI, which excludes food and energy prices, gained only 0.5%, which is the weakest result since July 2017.

British Retail Sales Unexpectedly Rose

The UK retail sales surprisingly increased last month, which adds to the hope that the economy would avoid a slowdown in the second quarter. On Thursday, the Office for National Statics reported that monthly retail sales increased by 1.0% in June, while economists expected a 0.3% decline. Year-on-year, the indicator rose 3.8%, also beating forecasts. While many analysts expect a downturn in Britain’s GDP, the unexpected rebound in retail sales might contribute to at a flat reading at least.

Russia’s GDP Added 0.7% in June

Russia’s economy increased by 0.7% last month compared to the same period in 2018, according to the country’s Economy Ministry, which presented the report on Thursday. In May, Russian GDP expanded by only 0.1%, which was revised down from the initially reported 0.2%. June’s performance helped the economy to secure a 0.8% growth in the second quarter of this year, after increasing by 0.5% in the first quarter. The ministry noted that economic growth was driven by a rebound in industrial input.

Australia’s Full-Time Employment Surges Over 21,000

Full-time employment in Australia jumped last month, yet the unemployment level remained unchanged at 5.2% for the third month in a row as more people are searching for a job. On Thursday, the Australian Bureau of Statistics reported that 500 new positions were added in June, as a decline in part-time employment countered the 21,100 increase in full-time jobs. The Reserve Bank of Australia is watching the labour market trends very closely, as it is weighing another rate cut by the end of 2019.

Japan’s Exports Are Down For 7th Straight Month

Japanese exports declined for the seventh month in a row amid the uncertainty over trade tensions between the world’s two largest economies – the US and China. Thus, exports tumbled 6.7% last month compared to the same period in 2018, the finance ministry said on Thursday. Economists polled by Bloomberg expected a decline by 5.4%. Despite the drop in exports, Japan’s trade balance remained positive in June, with a surplus of 589.5 billion yen, as imports fell more than anticipated.

US And Chinese Officials Continue Negotiations

US President Donald Trump warned that he could impose more tariffs on Chinese goods, as China wasn’t purchasing the large volume of American agricultural goods as pledged. After the president’s remark, the US and Chinese officials spoke by phone for a second time since the G20 summit in late June. US Trade Representative Robert Lighthizer and Treasury Steven Mnuchin spoke to China’s Commerce Minister Zhong Shan and Vice Premier Liu He, though no details of the deals have been released.

Upcoming News to Watch

Next week, the markets will continue to watch the Sino-US trade talks and the Brexit saga.

Also, several important economic indicators are planned in Europe, North America, and Asia. Thus, on Tuesday, the US will release its house price index and existing home sales. On next day, the US will publish several important economic updates, including the manufacturing, services, and composite purchasing managers’ index (PMI), and new home sales.

The European Central Bank will present its interest rate decision, along with the monetary policy decision.

The US will end the week with its GDP growth data for the second quarter, which will drive the stock markets and the US dollar.

Meet The Author
Anatol Antonovici
Anatol Antonovici
Senior Reporter

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.

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