Today's Highlights

  • US-China negotiations close to resolution

  • Playing Top Trumps on Twitter again

  • Shhh… nobody mention the “B” Word

 

Current Market Overview

According to US Treasury Secretary, Steven Mnuchin, negotiations with China are drawing to a favourable conclusion. However, he was not at liberty to discuss details, saying that it is "not a public negotiation." The focus for discussions and negotiations are intellectual property theft, forced technology transfer, market access, and market distortion by subsidies to State Owned Enterprises (SOEs). There are also reports that the US is rethinking its demand regarding SOEs in China, as the whole process is deeply rooted in the fundamental nature of the Chinese system.

Canada will release its Consumer Price Index (CPI) and retail sales data this week. The USA will also receive the latest retail sales results, along with housing data and the Beige Book – always a good benchmark for the health of the US economy.

Playing Top Trumps on Twitter again

Staying with the US, Trump once again attacked the Federal Reserve via Twitter, with his Tweet claiming that the Federal Reserve had not done its job properly. His argument was that otherwise, the “Stock Market would have been up 5000 to 10,000 additional points, and GDP would have been well over 4% instead of 3%…with almost no inflation.” We’re not sure where the figured come from or where to find the evidence to back that up, but that’s what he says, so it must be true.

Worldwide economic concerns seeping into markets

As concerns of a global economic slowdown run along in the background, data from both Europe and China will need to, at least, meet market expectations to keep the current risk appetite going. Europe is already, justifiably, expressing concern about economic data, particularly from Germany. This week’s German ZEW economic sentiment will be key to the Euro’s strength against its major currency partners, notably the Pound and US Dollar. There will also be data from a number of Eurozone Purchasing Managers’ Indices (PMIs), which have the potential to move the currency markets.

Shhh… nobody mention the “B” Word

In contrast, the UK economy has been holding up pretty well, especially considering all the Brexit shenanigans. This week will be a good test – there will be a triple whammy of CPI, employment and retail sales data from the UK.

Key Chinese data to determine direction of commodity currencies and Asia Pacific markets

Chinese data due this week includes Gross Domestic Product (GDP), industrial production and retail sales figures. GDP is expected to have slowed for the first quarter of 2019; this has the potential to affect a wide range of currencies, especially the Australian and New Zealand Dollars.

The Australian Dollar has enjoyed some strength against Sterling recently, so you may wish to consider protecting any AUDGBP payments in advance of the data release on Wednesday 17th April.

More excitement to come in the Antipodes?

While there are expectations of two Reserve Bank of Australia (RBA) interest rate cuts this year, recent data and comments from Australia’s central bank didn’t support such a view yet. Employment figures for Australia will be a wild card data release this week, too, so the Australian Dollar may be in for an interesting ride once more.

Near neighbours, New Zealand, will release their CPI figures, so with the New Zealand Dollar performing well recently, that’s one to watch.

Watch this space…

This week might be shortened by the Easter Bank Holidays, but it certainly won’t be boring!

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