Weekly Market Review - April 29-May 3
This week was quite positive for the British pound, which was boosted by the Bank of England’s upward revise in its GDP forecast. GBP/USD rose nearly 2% during the week while EUR/GBP fell 1.44%.
The US currency was the worst performer among the majors, declining by 0.48% against the euro and by 0.43% against Japanese Yen.
In the cryptocurrency market, Bitcoin surged about 10% since Monday, exceeding the $5,800 level.
Here are the most important events and macro indicators of this week:
Bank of England Keeps Rates Unchanged
The Bank of England (BoE) didn’t change the interest rates, keeping them at 0.75%. On Thursday, members of the central banks met for the first time since the Brexit official deadline. The decision, voted unanimously, was in line with analysts’ expectations. While the rates remained at the same levels, the BoE raised its growth forecasts. Thus, the bank now anticipated the UK GDP growth to expand by 1.5% this year compared to the previous estimate at 1.2%.
French Economy Maintains Steady Growth
The French GDP continued with its steady growth in the first quarter of this year, finding support from household spending, which recovered after the major protests at the end of 2018. The INSEE statistics agency announced on Tuesday that the second-largest economy in the EU expanded by 0.3% in Q1 2019 for the third straight quarter. The GDP quarterly performance was in line with analysts’ expectations and slightly below the 0.4% growth recorded by the eurozone region.
China’s Manufacturing And Services Sectors Disappoint Economists
China’s composite purchasing managers’ index (PMI), which touches upon both the services and manufacturing sectors, fell last month to 53.4 from 54.0 in March. Manufacturing PMI slightly increased to 50.1 in April, below the expected reading at 50.5. During the same period, the services PMI fell to 54.3 from 54.8 in March. The services sector accounts for over 50% of China’s economy. Separately, manufacturing PMI released by Caixin/Markit fell to 50.2 in April from 50.8 in March.
Hong Kong Economy Slows
Hong Kong’s GDP growth demonstrated the slowest annual pace in about a decade in the first quarter of this year, as the economy was dragged down by weak exports and investment performance. The financial hub was affected by China’s stagnating economy and its trade war with the US. Thus, in the first quarter, Hong Kong’s economy expanded by 0.5% year on year, the slowest increase since 2009. In quarterly terms, the GDP grew by a seasonally adjusted 1.2% after narrowing by 0.5% in Q4 2018.
US Private Payrolls Surprises Economists
In April, US firms added the most employees since July 2018, according to ADP Research Institute private data published on Wednesday. Thus, private payrolls expanded by 275,000 after a gain of 151,000 in March, which was revised up. Economists on average expected the indicator to grow by only 181,000. The figure was driven by gains in medium-sized businesses and service providers, which hired the most workers in about three years.
Canadian Economy Hit by Poor Weather Conditions
In February of this year, Canada’s GDP contracted by 0.1%, which cut a portion of January’s gain of 0.3%. The sluggish trend was caused by poor weather and a decline in resource production. Economists were expecting the Canadian GDP to be unchanged in February. However, it seems that the economy will barely increase in the first quarter of this year. The country’s mining and oil and gas sectors fell 1.6%, which represents the sixth decline in a row.
Upcoming News to Watch
Next Monday, markets will be closed in South Korea and Japan due to the Children’s Day while the UK will have the Early May Bank Holiday. Elsewhere, the eurozone will release its retail sales index and composite PMI by Markit.
On Tuesday, Australia and New Zealand’s central banks will present their interest rate decisions.
On Wednesday, China will report its exports, imports, and trade balance data. Later during the day, the second largest economy in the world will release inflation data for April.
The week will end with UK’s GDP growth report in annual and quarterly terms. The UK will also release data on industrial production, manufacturing production, and trade balance.
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.