Outside the United States
It was a busy week on the economic calendar.
In the 1st half of the week, there was nothing positive to consider by the markets.
Factory orders fell 10.3% in March, the trade deficit widened in March, and activity in the service sector fell.
The market’s preferred non-manufacturing PMI ISM increased from 52.5 to 41.8.
The employment figures also tested the resilience of the market throughout the week.
On Wednesday, after pretty disastrous ADP figures, the first jobless claims jumped an additional 3.169 million in the week ending 1.st May.
The surge preceded Friday’s non-farm payroll figures for April, which showed a drop of 20.5 million. As a result of the decline, the unemployment rate in the United States fell from 4.4% to 14.7% in April.
The only consolation was that economists had forecast an unemployment rate of 16%. It was enough to support the demand for riskier assets that day.
In the equity markets, the Dow Jones rose 2.56%, the NASDAQ and the S & P500 rebounded by 3.50% and 6.00% respectively.
Outside the UK
It was a relatively quiet week on the economic calendar. Key statistics included finalized PMI figures for the private sector for April and house price figures.
Statistics were biased towards the negative. Finalized services and the composite PMI were revised upwards from preliminary figures, providing the only positive point.
This was little consolation, as PMIs remained at 13 levels despite the upward revisions
Housing prices fell 0.7%, reversing a 0.2% increase in March.
The drop in construction PMI from 39.3 to 8.2 in April was also negative.
While the statistics were negative, the BoE provided much needed support to the pound by standing up on monetary policy.
Support for the pound came despite the BoE offering bleak economic prospects.
On the geopolitical risk front, Brexit updates pushed the pound back mid-week, with the two sides having made little progress.
There was some hope of progress towards a trade agreement between the United States and the United Kingdom, but it will take time for significant progress to be made.
During the week, the British pound fell 0.77% to $ 1.2410. The FTSE100 ended the week up 3.00%, following a gain of 0.19% from the previous week.
Outside the eurozone
It was another busy week economic front, with statistics once again heavily biased.
April manufacturing and services PMIs for Italy and Spain were at the center of 1st half of the week.
Finalized PMIs from France, Germany and the eurozone as well as German factory orders and retail sales from the eurozone also sparked interest.
For Italy and Spain, while manufacturing PMIs were down and it was PMI Services that caused a market shock.
On Wednesday, service PMIs coincided with a record drop in factory orders in Germany.
Retail sales in the eurozone were not much better, with a drop of 11.20% before the April lockdown…
Later in the week, the disastrous industrial production figures and German trade data had a moderate impact. The only consolation for the week may have been that Germany avoided a trade deficit by a certain margin.
For the week, the euro rose 1.29% to $ 1.0839, offsetting a gain of 1.46% from the previous week.
For the main European indices, the week was bullish. EuroStoxx600 and DAX30 rose 1.08% and 0.39% respectively, while CAC30 fell 0.49%.
It was another bullish week for the Australian dollar and the Kiwi dollar, as the pair managed to avoid a reversal on Friday.
In the week ending 8e In May, the Australian dollar rose 1.78% to $ 0.6532, the Kiwi dollar up 1.20% to $ 0.6136.
For the Australian dollar
It was a relatively busy week for the Australian dollar on the economic front.
Key statistics included retail sales and trade for March Wednesday and Thursday.
Retail sales jumped 8.5%, the increase attributed to hoarding. Despite expectations of an April collapse, the Australian found support for the numbers.
Trade data also impressed, with the trade surplus dropping from 4.361 billion Australian dollars to 10.602 billion Australian dollars.
Again, markets and RBA are expected to deteriorate within 2North Dakota quarter, which limited the rise in statistics.
On the monetary policy front, the RBA left interest rates unchanged on Tuesday, while providing markets with more support when needed.
The RBA’s baseline scenario for the economic outlook did not sink the Australian dollar during the week.
In fact, it was China’s trade data that ultimately boosted the Australian dollar. A 3.5% increase in exports surprised the markets …
For the kiwi dollar
It was also a busier week on the economic calendar.
Key statistics included 1st quarterly employment figures and inflation expectations.
Employment increased 0.7% on 1st quarter, bringing the unemployment rate to 4.2%. Economists had forecast a drop of 0.3% and an unemployment rate of 4.3%.
While the employment figures were positive, the inflation figures were quite the opposite.
2-year inflation expectations collapsed on 2North Dakota quarter from 1.93% to 1.24%. Things haven’t improved much for a year, with inflation set to drop from 1.88% to 0.74%. However, this was hardly surprising when one considers the drop in crude oil prices.
In the end, the better than expected employment figures and the end of the coronavirus in NZ were the positive points.
The New Zealand economy should now be in recovery mode, which could give the RBNZ some respite.
For the loon
It was a relatively busy week on the economic calendar, with negatively biased statistics.
Although the statistics showed a further deterioration from the previous month, they were more optimistic than the forecasts.
In March, the trade deficit widened from C $ 0.98 billion to C $ 1.41 billion, against a forecast of C $ 2.00 billion.
Employment in April fell 1.994 million, after falling 1.011 million in March. Economists had forecast a drop of 4 million. The unemployment rate fell from 7.8% to 13%, which is well below the forecast of 18%.
In the private sector, Ivey’s PMI disappointed, with the PMI dropping from 26.0 to 22.8 in April. Economists had forecast a PMI of 25.0.
In the end, an upward trend in crude oil prices and an improved sense of risk generated gains for the loonie this week.
The loonie rose 1.15% to end the week at C $ 1.3927.
For the Japanese yen
It was a relatively quiet week on the data front.
Key statistics included household spending in March and final PMI figures for April services.
There was nothing positive to learn from the figures, as household spending fell 4% in March.
Activity in the services sector also stopped, the finalized PMI being revised down from 22.8 to 21.5. In March, the PMI stood at 33.8.
While the statistics were skewed towards the red, the yen found some support, but nothing exciting…
The Japanese yen rose 0.24% to end the week at ¥ 106.65. During the previous week, the yen rose 0.56% against the US dollar.
It was a relatively busy week on the economic front.
Key statistics included April’s service sector PMI and trade data.
Statistics were skewed towards the positive this week. The rate of contraction in service sector activity slowed in April, with the PMI dropping from 43.0 to 44.4.
More important, however, is a 3.5% increase in exports. Economists had forecast a drop of 15.7%.
Imports, however, fell 14.2%, as the lack of demand created uncertainty about the future.
The yuan failed to end the week in the green, threats from Trump and the uncertain economic outlook weighing.
In the week ending 8e In May, the yuan lost 0.16% to CNY7.0742 against the greenback.
The CSI300 rose 1.30%, while the Hang Seng ended the week down 1.68%.