Weekly Market Commentary
US equity markets finished a challenging week on a high. The burgeoning 'global trade war' continues, with the US levying a further US$34 Billion in tariffs on China, while Canada has imposed US$12.6 Billion in retaliatory tariffs. Markets are being impacted from the tit-for-tat but at some point it becomes blasé. The fight for 'reciprocal and fair trade' continues and it is a fight the White House welcomes and is odds on to win!
The week ahead is punctuated by the US Independence Day holiday on the 4th of July. The week begins with the important Japanese 'Tankan' report and the RBA rate decision. The week closes with US employment data, in the form of the Challenger and ADP reports, Non-Farm Payrolls and Employment. Trade is likely to continue to dominate the narrative and escalations will continue to unsettle markets.
The real victims of the growing 'trade wars' are the trade exposed nations, including Australia and New Zealand. They have felt the effects, that has manifested in the currencies, which are breaking through important support levels. Year-long lows are now being overwhelmed and support levels are tentative. The RBNZ was dovish in their statement last week, while local business confidence is in the doldrums, which triggered the initial sell-off the last week. It is the turn of the RBA this week and they will be well aware of the fall-out from the RBNZ rhetoric in the week gone by.
Trade remains the word.
Weekly Market Calendar
2/7 Australia Manufacturing PMI, Tankan Report, NZ Dairy Auction, France/German/UK/EU Manufacturing PMI, EU Employment, US Manufacturing PMI, ISM Manufacturing
3/7 Australia Building Approvals, RBA Rate Decision, EU Retail Sales, US Factory Orders, US Durable Goods Orders
4/7 Independence Day, NZ House Prices, NZ Job Ads, US Services/Composite PMI, NZ Commodity Prices, Australia Trade, Australia Retail Sales, China Services/Composite PMI, UK/France/German/EU Services/Composite PMI, US Weekly Mortgage Applications
5/7 German Factory Orders, Challenger Jobs Report, ADP Jobs Report, US Services/Composite PMI, US Non-Manufacturing PMI, Fed Minutes
6/7 German Industrial Production, UK House Prices, Non-Farm Payrolls, US Employment, US Trade
Paul Bettany
Collinson & Co
0406-744-923
paul@collinsonfx.com