Author: Anatol Antonovici
Senior Reporter
Anatol Antonovici

Weekly Market Review - May 20-24

The Australian dollar and Japanese yen have been the best performers of this week, as the European and US currencies are still suffering from the uncertainties related to the trade tensions between China and the US. USD/JPY fell 0.45% on the week and 0.39% against the euro.

In the cryptocurrency market, Bitcoin is moving in a sideways trend. It departed from the recent year-to-date peak and currently trading at around $8,000. Most of the altcoins are following Bitcoin, with some of them showing bigger gains on individual fundamentals.

Macroeconomic News

Japanese Exports Drop For 5th Straight Month

In April, Japanese exports saw slowed growth for the fifth month in a row, mainly because of a decline in shipments of chip-making equipment to China. On Wednesday, the Ministry of Finance (MOF) said that exports fell 2.4% last month year-on-year (y/y), compared to a similar performance recorded in March. Analysts expected exports to contract in April by 1.8%. Japan’s trade surplus with the US increased for a second month thanks to acceleration in auto exports. Exports to China tumbled 6.3% in April.

Japan Core Inflation Show Best Performance in 3 years

Japan’s core consumer prices increased last month by 0.9%, the fastest growth in about three years. The move was driven by retailers, who passed on increasing costs to households. Also, the inflation growth came from an increase in package tour fees right before Japan’s 10-day holiday. While the Bank of Japan regards the core CPI growth as a positive sign, the long-term sustainability of the upward trend might be negatively impacted by the trade tensions between China and the US.

US New Home Sales Fall More Than Expected

The US Commerce Department announced on Thursday that sales of new single-family homes decreased last month by 6.9% to a seasonally adjusted annual rate of 673,000 units. The move was caused by higher home prices. However, demand for housing is still supported by falling mortgage rates and a robust labor market. The April drop came after three monthly gains in a row. The March sales rate was revised up to 723,000 homes, the highest level since 2007.

German Business Morale Decreases

On Thursday, the Ifo institute said that German business climate index had fallen this month to 97.9 from 99.2 in April. Analysts expected the indicator to stop at 99.1. The drop was caused by a decrease in services sector confidence, according to the survey. In construction, the business climate increased for the third month in a row given that the construction boom continues. Ifo President Clemens Fuest concluded that the German economy was still lacking in momentum.

UK Price Growth Slow in April

The UK inflation increased in April by less than expected, though it still showed the best performance this year. On Wednesday, the Office for National Statistics said that consumer prices index expanded at an annual rate of 2.1% last month, after a 1.9% growth in March. Both the Bank of England and economists expected a boost of 2.2%. The main drivers behind April inflation were electricity and gas prices. The impact of higher bills was offset by computer game and package holiday prices.

Canadian Retail Sales Show Biggest Growth in 10 Months

In March, Canadian retail sales saw the biggest growth in 10 months. On Wednesday, Statistics Canada reported that retail sales increased by 1.1% in March, after a 1% gain in the previous month. In volume terms, sales increased by 0.3%, after a 0.4% gain in February. The March growth came in spite of a decline in car sales. Core retail sales, which exclude cars and gasoline, added 1% in March and 1.1% in volume terms.

Upcoming News to Watch

Next week, the US and the UK markets will be closed on Monday in relation to the Memorial Day and Spring Bank Holiday respectively.

On Tuesday, several important economic indicators will come from Europe. Thus, Switzerland is about to release GDP data and its trade balance. The eurozone will report on business climate and consumer confidence.

Next day, France will report the GDP performance in monthly, quarterly, and annual terms. Similar reports will come from the US and Canada on Thursday and Friday respectively.

Meet The Author
Anatol Antonovici
Anatol Antonovici
Senior Reporter
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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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