Weekly Market Review - May 20-24
This week hasn’t been quite volatile for most the major pairs, with EUR/USD adding 0.31%. The British pound saw some evident fluctuations on Friday as PM Theresa May announced that she would resign on June 7.
The Swiss franc is the best performer of the week, followed by the Australian dollar and Japanese yen.
In the cryptocurrency market, Bitcoin continues to move close to the $8,000 mark. Some altcoins, like Litecoin and EOS, surged on Friday, beating the performance of Bitcoin.
PM Theresa May to Resign on June 7
On Friday, Prime Minister Theresa May announced that she would step down on June 7. In the last few weeks, the pressure from her governing Conservative Party increased, as more members called her to make way for a new leader who would be capable of solving the Brexit dilemma. The PM said that it was clear for her that it was in the best interest of the country to be led by a new prime minister. Thus, she officially announced that she would resign as leader of the Conservative and Unionist Party.
German GDP Expands by 0.4% in Q1
German Federal Statistics Office said on Thursday confirmed the preliminary gross domestic product (GDP) quarterly growth of 0.4% in annual growth of 0.7%. The economic growth was driven by household spending, with private consumption gaining 1.2% on the quarter – the biggest increase in eight years. Private consumption contributed 0.6 percentage points to the GDP growth. German exports rose more than imports. Thus, net trade contributed 0.2 percentage points to the economic expansion.
US Initial Jobless Claims Point to Stability in Labor Market
The number of US citizens who applied for unemployment benefits for the first time surprised economists with a decline, indicator a robust labour market despite the slowing economy. On Thursday, the Labour Department said that the initial jobless claims indicator fell 1,000 to 211,000 for the week ended May 18, while analysts anticipated growth to 215,000. Data for the previous was not revised.
UK Retail Sales Disappoint Economists
UK retailers had the worst sales performance for the time of year in more than ten years. Today, the Confederation of British Industry (CBI) reported that, according to its survey, retails sales balance tumbled to -27 this month from +13 in April, way below analysts’ expectations and the lowest since October 2017. Adjusted for the time of year, the indicator performed even worse, showing the weakest level since March 2009. The quarterly reading of retailers' investment intentions collapsed to its lowest since the survey started in 1983.
Eurozone’s Composite PMI Didn’t Meet Expectations
Eurozone’s flash composite purchasing managers' index (PMI), released by IHS Markit, increased only to 51.6 in May from 51.5 in April, below analysts’ expectations at 51.7. The indicator is regarded as a significant guide to economic health. The recovery in the bloc’s business activity is negatively impacted by the contraction in the manufacturing industry, which puts pressure on services firms. The indicator might push the European Central Bank to increase its supportive measures for the eurozone’s economy.
Singapore Does Well Amid US-China Trade War
In the first quarter of the year, Singapore’s GDP expanded at a faster pace than the government’s previous preliminary figures. The acceleration proves that the financial hub is resistant against slowing global demand amid the trade tensions between the US and China. Singapore’s economy rose 3.8% on the quarter, higher than the preliminary data of indicating a 2% growth and above analysts’ expectations at 2.3%. Compared to the same period in 2018, GDP added 1.2%.
Upcoming News to Watch
On Monday, the markets in the US and the UK will be closed on Memorial Day and Spring Bank Holiday, respectively.
The US dollar might increase its volatility on Thursday, when the US will release its economic growth for the first quarter of 2019, both in quarterly and annual terms.
Other countries behind Forex majors will also present their GDP performance, including Switzerland, France, Brazil, Italy, and Canada.
Investors will continue to watch the development of the US-China trade war and the next move towards Brexit.
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.