Weekly Market Review - September 23-27
This week has been quite volatile, with the US stock markets showing on Tuesday the biggest daily drop in over a month. Elsewhere, the UK’s FTSE 100 index rose to the highest level since the beginning of August.
In the Forex market, the US dollar has been the best performer among majors after the Canadian currency. EUR/USD fell 0.87% over the week.
In the cryptocurrency market, Bitcoin tumbled below $8,000 for the first time since June, as the digital currency broke the support level of a descending triangle, which is regarded as a bearish pattern in technical analysis. Other coins, including Ethereum, Litecoin, EOS, Stellar Lumens, Ripple’s XRP, and Monero have also shown double-digit losses.
Sentiment in Eurozone to Lowest Level in 5 Years
Economic sentiment in the 19 countries sharing the euro tumbled this month amid trade tensions. On Friday, the European Commission said that the economic mood declined in September to 101.7 points from 103.1 in August, which is the lowest level in about five years. Analysts expected a slight decline to 103.0 points. Sentiment in the industry sector declined to -8.8 points from -5.8 in August, the lowest reading since 2013. Elsewhere, sentiment in the service industry slightly rose to 9.5 points from 9.2, beating expectations.
US Jobless Claims Slightly Rose
The number of US citizens first time applying for unemployment benefits slightly increased last week ended September 21. On Thursday, the Labor Department said that initial jobless claims rose 3,000 to 213,000. Data for the previous week was revised upward by 2,000 applications. Economists surveyed by Reuters expected an increase to 212,000 in the last week. The four-week moving average, which is regarded as a more accurate measure of labour market trends, fell 750 to 212,000.
British Consumer Sentiment Down to 6-Year Low
Consumer sentiment in the UK declined to a six-year low driven by worries about the effect of Sino-US trade war, domestic political uncertainty, and job security. Market research firm YouGov said that its consumer sentiment index fell to 103.4 this month from 104.0 in August. This is the lowest reading since May 2013. The British economy surprisingly contracted in the second quarter of this year. Besides, the Bank of England anticipates only a modest acceleration this quarter that ends in September.
US Consumer Confidence Shows Biggest Drop in 9 Months
The US consumer confidence showed the biggest decline in nine months in September, exceeding analysts’ expectations. The lack of confidence is driven by the US economic outlook amid the US-China trade war. On Tuesday, the industry group Conference Board said that its consumer confidence measure declined to 125.1 from 134.2 in August, which was revised downward. The economists surveyed by Reuters expected a slight decline to 133.5.
Germany Composite PMI Below 50 Points
Private sector activity in Germany tumbled for the first time in over six years this month as the manufacturing recession surprisingly got worse while the growth in the service sector slowed. On Monday, Markit’s flash composite purchasing managers’ index (PMI) declined to 49.1 from 51.7 in August. This is the first decline since April 2013. Note that any reading below 50 points to a contraction. Analysts expected a decline to 51.4. The manufacturing PMI tumbled to 41.4, the lowest level in over 10 years.
South Korean Exports Probably Down Again
South Korean exports likely contracted for the tenth month in a row in September amid Sino-US trade conflict. However, the pace of the contraction was slower at this time. According to the average forecast of 11 polled economists, exports might have fallen by 11.2% in September compared to the same month in 2018, which is a better reading than the 13.8% decline in August. Economists agree that South Korea needs to time for exports to rebound. We might see positive figures in the first half of 2020.
Upcoming News to Watch
Next week, on Monday, China will report on its manufacturing PMI, non-manufacturing PMI, and the composite PMI. In Europe, the UK and Spain will release data on gross domestic product (GDP) growth, while Germany will report on unemployment change and inflation.
On Tuesday, the Reserve Bank of Australia will announce its interest rate decision. In Europe, the UK and Germany will report on their manufacturing PMI while the eurozone will publish inflation data. The US will also release manufacturing PMI data later on the day. Markets in China and Hong Kong will be closed in observance on the National Day. In fact, Chinese markets will be closed until the end of the week.
On Wednesday, markets in India will be closed on Mahatma Gandhi Jayanthi holiday.
On Thursday, the UK will release its services and composite PMI data. Markets in Germany and South Korea will be closed in observance of the Unification Day and National Foundation Day of Korea, respectively.
The week will end with the expected US Nonfarm Payroll report.
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.