Weekly Market Review - June 24-28
On Friday and Saturday, the world watches the G20 summit in Osaka, Japan. US President Donald Trump will meet with world leaders to discuss economic and geopolitical matters. All eyes are on the next turn of the US-China trade war.
This week, forex pairs have been less volatile, with EUR/USD slightly declining by 0.03% for the week. However, Friday economic indicator releases might still impact the pair.
In the cryptocurrency market, Bitcoin updated the year-to-date peak, touching the $13,785 level. Nonetheless, the coin couldn’t maintain that high and is currently trading at around $11,000.
Here are the most important economic indicators released this week:
Final Reading of US GDP Growth Sticks to Previous Estimate
The US GDP growth expanded in the first quarter, according to official data presented by the government on Thursday. Thus, GDP increased by 3.1% compared to the same period of last year, the third reading of Q1 data shows, which is unchanged from the last estimate in May. Economists expected the indicator to match the previous estimate. Excluding trade, government spending, and inventories, the GDP growth accelerated by 1.3%, which is the worst result since the second quarter of 2013.
US Auto Sales Fall 1.5% in June
Car sales in the US likely have declined by 1.5% in June compared to the same period in 2018, according to auto industry consultants J.D. Power and LMC Automotive. The companies cite higher vehicle prices as the first reason behind the drop. The consultancies expect the total auto sales in the US at 1.47 million units this month. Retail sales of new cars might have declined by 2.9% to 1.15 million. While sales decline, the net revenue of car manufacturers is increasing thanks to the higher prices.
US Jobless Claims Increase More Than Expected
The number of US citizens that applied for unemployment benefits for the first time increased more than expected last week ended June 22. On Thursday, the US Labor Department said that initial jobless claims expanded by 10,000 to a seasonally adjusted 227,000 against the expected growth to 220,000. Data for the previous week was revised up by 1,000 applications compared to initial estimates. Economists are expecting the claims to raise more as carmakers temporarily closed assembly plants for seasonal retooling.
Eurozone’s Economic Confidence Touches Lowest Level in 3 Years
Economic sentiment in the eurozone tumbled to its lowest level in about three years this month, with Germany and Italy being the worst performers. On Thursday, the European Commission said that the economic confidence in the countries sharing the euro fell to 103.3 points in June, compared to 105.2 recorded in May. Thus, the indicator fell more than the expected figure at 104.6 and touched the lowest level since August 2016. The sentiment showed negative results in Germany, Italy, Spain, France, and the Netherlands, among others.
US Consumer Pessimism Increases
US consumer confidence declined in June more than expected, touching the lowest level since September 2017. Industry group Conference Board said on Tuesday that its index of consumer sentiment dropped to 121.5 from 131.3 in May, which was revised down from 134.1. Economists surveyed by Reuters anticipated a slight decline to 131.1. Consumers are more pessimistic about the labour market conditions and US business amid the current trade war between the US and China.
UK Consumer Sentiment Fell More Than Expected
A report by market research firm Gfk showed that the consumer sentiment index in the UK declined this month to -13 from -10 in May, which was the highest in seven months. Economists expected the reading to drop to -11. The indicator was in the negative territory since shortly before the Brexit vote. British households are pessimistic about the UK’s economy and their personal finances amid the uncertainty over Brexit and the Sino-US trade war.
Upcoming News to Watch
On Monday, markets in Canada and Hong Kong will be closed for Canada Day and Hong Kong Special Administrative Region Establishment Day, respectively. On Thursday, July 4, trading will be closed across all US markets in observance of Independence Day.
The eurozone, the UK, and the US will release manufacturing PMI data on Monday.
On Tuesday, the Reserve Bank of Australia will publish its interest rate decision. Economists expect a rate cut from 1.25% to 1.00%.
The US will end the week with the important Nonfarm Payrolls report and the unemployment rate, which will shake the USD price.
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.