Author: Anatol Antonovici
Senior Reporter
Anatol Antonovici

Weekly Market Review - June 24-28

This week, several major companies reported their financial results over the quarter. Thus, FedEx and Micron reported better than expected earnings per share (EPS) while Nike recorded EPS below forecasts.

In the Forex market, EUR/USD slightly fell by 0.03% on the week as the world is watching the development of the Sino-US trade war. On Friday and Saturday, the markets are focused on the G20 summit in Osaka, Japan.

Gold and silver continue to benefit from the global pessimism, adding 1.83% and 1.37% for the week, respectively.

Bitcoin touched the highest level since January 2018, to $13,785. However, the largest cryptocurrency by market cap suddenly went bearish on Thursday and is currently trading at around $11,000.

Macroeconomic News

UK GDP Growth in Q1 in Line With Previous Estimates

On Friday, the UK Office for National Statistics (ONS) said that the British economy grew by 0.5% in the first quarter, up from 0.2% recorded in the previous quarter. Stockpiling was the main driver behind the GDP growth, as businesses and consumer tried to offset potential supply disruptions in the case of a no-deal Brexit. The GDP growth rate was in line with previous estimates and analysts’ expectations. Manufacturing rose 1.9% during the quarter, the most in almost 20 years.

Industrial Profits in China Rebound

China’s industrial profits increased last month on higher sales and improving margins. However, economists are not certain whether the modest increase might last amid the current trade war between China and the US. On Thursday, China’s National Bureau of Statistics (NBS) said that profits expanded year-on-year by 1.1% in May to 565.6 billion Yuan, which is the equivalent of $82.21 billion. In April, the indicator fell 3.7%. Year-to-date, industrial firms gained 2.38 trillion Yuan in profits, down 2.3% y/y.

New Zealand’s Central Bank Keeps Rates at The Same Level

The Reserva Bank of New Zealand (RBNZ) kept the interest rates unchanged on Wednesday at a record low of 1.50%. However, the central bank admitted that more cuts to borrowing costs might be necessary considering the current economic risks. RBNZ’s decision was in line with analysts’ expectation. However, the central bank turned surprisingly dovish and warned that the global economic slowdown is affecting the domestic economy. Economists expect the RBNZ to cut the rate by 0.25% at the next meeting.

US New Home Sales Surprisingly Decline

On Tuesday, the US Commerce Department said that new home sales tumbled 7.8 to an annual rate of 626,000 units in May (seasonally adjusted), which is the lowest level since last December. The April performance was revised up from 673,000 units to 679,000. Analysts on average expected the indicator to increase in May by 1.9% to a pace of 680,000 houses. New home sales represent about 10.5% of the total housing market sales.

German Business Morale Touches Lowest Level Since Nov 2014

German business sentiment dropped to the lowest level in more than four years in June, according to the Ifo institute. The Monday survey showed that the business climate index in Germany fell this month to 97.4 from 97.9 in May. Economists expected an even worse performance, to 97.2. The business morale supports the expectations that the German GDP slowed in the second quarter. After nine consecutive years of growth, Europe’s largest economy is affected by Sino-US trade tensions and the delayed Brexit.

UK Retail Sales Declined in June

UK retail sales tumbled in June at the fastest annual pace in the last decade. The Confederation of British Industry (CBI) said that monthly retail sales indicator fell to -42 from -27 recorded in May, which is way below the analysts’ forecasts of an increase -10. The organisation hinted that the huge decline in annual terms is caused including by strong sales recorded in the same period of last year when the football World Cup was a big contributor. Another reason behind the drop in retail sales is the cold weather in May.

Upcoming News to Watch

Next week on Thursday, the US markets will be closed in observance of the Independence Day. On Monday, the markets in Canada and Hong Kong will be closed for the Canada Day and Hong Kong Special Administrative Region Establishment Day, respectively.

On Monday, Germany, the UK, and the US will release manufacturing purchasing managers’ index (PMI) data. Besides, Germany will report on its unemployment rate change.

On Tuesday, the Reserve Bank of Australia will present its interest rate decision.

On Friday, the US will release Nonfarm Payrolls data, which will show the strength of the labour market.

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. Learn more.

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