Weekly Market Review - May 13-17
This week has been quite strong for the US dollar, which rose 0.63% against the euro and over 1.9% against the British pound.
The Australian dollar has been among the worst performers due to a higher than expected unemployment. Now economists expect the central bank to cut rates during the next meetings. AUD fell 1.76% against the US dollar.
In the cryptocurrency market, Bitcoin updated the year-to-date peak, surging to over $8,300, but eventually was pushed back and currently trading at around $7,300.
ECB is Satisfied With CPI Growth
On Friday, Eurostat said that eurozone’s consumer price index (CPI) rose last month by 1.7% in annual terms, compared to the 1.4% growth pace recorded in March. The positive dynamic gives some rest to the European Central Bank (ECB), whose inflation target is just below 2%. However, the increase might be a temporary move related to the Easter holiday. In monthly terms, prices rose 0.7%, in line with expectations and compared to a 1% growth in March. Core CPI year-on-year rose last month by 1.4%.
Auto Sales in Europe Fall 0.5%
Car sales in Europe declined by 0.5% last month, according to a Friday update from the European Free Trade Association (EFTA). The negative performance was led by Nissan, Ford, and Volkswagen (VW). Total car registration in the EU fell to 1.345 million vehicles from 1.351 million recorded in the same period of 2018. In the January-April period, sales decreased by 2.5%. Nissan sales tumbled 17.1% as the company is facing a difficult period related to the scandal surrounding former chairman Carlos Ghosn.
Australian Unemployment Puts Pressure on RBA
Australian unemployment surprised economists with a worse-than-expected performance, putting additional pressure on the central bank to cut interest rates. The jobless rate in April increased to 5.2% from 5.1%, which was revised upwards. This is the highest unemployment in eight months. The participation rate rose to a record high while underutilization surged 0.4% to 13.7%. The local dollar was strongly affected by the situation in the labor market, falling to the lowest level since January.
US Retail Sales Down 0.2% Despite Expected Growth
US retail sales fell in April for the second time in the last three month, while economists expected a growth. The index was dragged down by weak sales in the auto and construction sectors. The Commerce Department said on Wednesday that retail sales declined 0.2% last month after a 1.7% growth in March, which was the biggest gain in the last two years. Analysts expected the indicator to add 0.2%. The retail sales in the so-called “control group”, which excludes food services and car dealers among others, was unchanged.
Eurozone Economy Expands by 0.4% in Q1
The economic growth of the eurozone accelerated in the first quarter of 2019, Eurostat said on Wednesday. The performance was driven by a rebound in Germany, EU’s biggest economy at the moment, and the slowdown in Italy’s recession. The economy of eurozone’s 19 countries expanded by 0.4% compared to a 0.2% increase record in the fourth quarter of 2018, which is in line with the initial outlook. Year-on-year, the economy expanded by 1.2%, also in line with the initial forecast.
China’s Retail Sales Below Expectations
China released retail sales and industrial output figures for April, which were below expectations. The update comes amid the re-escalating trade tensions between China and the US. Thus, Beijing might be forced to consider more stimulus measures to support the economy. The National Bureau of Statistics (NBS) said that retail sales last month rose 7.2% compared to the same period last year, the slowest growth since 2003. Analysts expected an increase by 8.6%.
Upcoming News to Watch
Next week, Japan will be in the spotlight late on Sunday as it will release GDP growth changes in quarterly and annual terms. On Wednesday, the country will publish imports and exports data, which will define the trade balance indicator.
On Monday, markets in Canada and Singapore will be closed due to local holidays.
The UK will come with a series of reports on Wednesday, which might move the price of GBP. Thus, the country will report on inflation, house price index, and production input and output. The UK will also close the week with retail sales data for April.
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.