Weekly Market Review - June 10-14
This week has seen the US dollar rebounding, with EUR/USD touching the lowest level since June 6 and currently trading at around 1.1243. The pair has lost 0.79% for the week. The American currency gained some confidence after Trump temporarily suspended the tariff on Mexican goods.
In the commodities market, gold and silver continue to grow, adding 0.97% and 0.63%, respectively, amid trade tensions between the US and China. Oil prices declined over 2.5% on weakening global demand.
In the cryptocurrency space, Bitcoin is reviving, adding over 5% for the week and currently trading at around $8,400.
US Jobless Claims Unexpectedly Increase
The US citizens applying for unemployment benefits for the first time surprisingly increased last week, hinting to a potential weakening of the labour market after job growth has lost pace in May. Initial jobless claims rose 3,000 to a seasonally adjusted 222,000 for the week ended Saturday, June 8. Analysts expected the indicator to fall to 216,000. The four-week moving average, which is regarded as a more accurate measure of labour market data, added 2,500 to 217,750 last week.
French Inflation Decline More Than Expected
French consumer price index (CPI) in monthly terms decreased more than anticipated in May, mainly driven by a decline in service sector prices. The increase in food prices couldn’t drag the inflation indicator in the positive territory. On Friday, the INSEE statistics agency said that inflation added 0.1% compared to April and 0.9% year-on-year. The final May performance was below analysts’ expectations at 1.1% and below April revised rate of 1.3%.
Eurozone’s Industrial Output Fell 0.5% in April
Industrial production in the eurozone declined again in April, mainly because of a tumble in Germany and a slight decline in Italy. European statistics office Eurostat said on Thursday that industrial output in the countries sharing the euro fell 0.5% in April, in line with analysts’ expectations. Year-on-year, the indicator lost 0.4%. The monthly decline in April came after a 0.4% drop in the industrial output in March. The worst performer of the indicator was durable consumer goods, which fell 1.7%.
US Core PPI is up 0.4% Again
Underlying producer prices index (PPI) in the US has strengthened for the second month in a row in May, finding support in the growth of hotel accommodation and an increase in portfolio management service fees. The Labor Department said on Tuesday that core PPI, which excludes food, energy, and trade services, increased by 0.4% in May, after a similar growth in April. The indicator rose 2.3% year-on-year. Analysts expected the core PPI to add 0.1% in May and 2.0% in annual terms.
German GDP Growth Expected to Slow
The economic growth outlook for Germany for the second quarter of 2019 is not promising amid a pressure caused by the global trade war between the US and China, which is negatively impacting the country’s industrial sector that relies on exports. On Thursday, the German Economy Ministry said that it was expecting the growth of gross domestic product (GDP) to slow or even stagnate in the second quarter. In the three months from January to March, the country’s economy grew by 0.4%.
China’s Exports Defy Trade Tensions
China’s exports surprised the markets with a rebound in May in spite of higher US tariffs. However, imports showed the biggest decline in about three years, which further demonstrates a weak domestic demand. In these circumstances, the government might be forced to inject stimulus measures. Exports in May rose 1.1% year-on-year, while analysts expected a decline. Imports last month tumbled 8.5%, the sharpest drop since July 2016. Economists forecast imports to decline by 3.8%.
Upcoming News to Watch
Next week, several important economic reports will come from Europe. Thus, on Tuesday, the eurozone will release inflation data for May, including core CPI, both in monthly and annual terms. Separately, investors will wait for trade balance data for April and the economic sentiment from ZEW.
On Wednesday, the UK will report on its inflation for May, the house price index, and the production price index input and output. However, the main event is planned for Wednesday, when the Bank of England will present its interest rate decision.
Germany will end the week with data on purchasing managers index in the manufacturing and services sectors.
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.