Weekly Market Commentary
Markets closed on a high, with equities extending gains, for the 2019 year. Markets have been extremely positive, with regards the US/China Trade negotiation process, but went into overdrive with the Chinese new offer. The Chinese have offered to eliminate the US/China trade deficit by 2024! Markets surged with optimism. The US Bond yields continued to climb with the positive sentiment. New York Fed Chair Williams added to the 'witches brew' with predictions of a strong and healthy US economy, but with careful and considered monetary policy.
The strong start to the year has been a reflection of rising confidence in US/China trade talks and a more conservative Federal Reserve. Interest rates have retreated and prospects are very strong. Brexit has been challenging with chaos continuing in the UK, which will infect the EU. A no deal Brexit, has become the most likely scenario, as the March 29 deadline approaches. The pressure is building and the 'no deal Brexit' will eventuate or force the EU to offer a reasonable divorce agreement. The GBP has recovered to 1.2875, while presenting a massive challenge/opportunity with the enormous events to unfold, while the EUR slipped to 1.1350.
Australian Employment will be a focus of local markets, while the week will kick off with key Chinese economic data. Chinese GDP, Retail Sales and Industrial Production will begin the week and set the tome. The ECB will deliver a rate decision, later in the week, while much of the US data is being delayed due to the partial Government shut-down. Trade and Central Bank rhetoric will dominate the macro markets in the coming week.
Weekly Market Calendar
21/1 UK House Prices, China Retail Sales, China Industrial Production, China GDP
22/1 NZ Services PMI, Australia Consumer Confidence, German/EU ZEW Economic Sentiment, US Existing Home Sales
23/1 NZ CPI, Australia Leading Index, Japan Trade Exports/Imports, US Weekly Mortgage Applications, US House Price Index, EU Consumer Confidence
24/1 Australia Manufacturing/Services/Composite PMI, Australia Employment, NZ Credit Card Spending, Japan Leading Index, France/German/EU Services/Manufacturing/Composite PMI, ECB Rate Decision, US Weekly Jobless Claims, US Services/Manufacturing/Composite, US Leading Index, Kansas City Fed Manufacturing Index
25/1 NZ Migration, Japan CPI, German IFO Business Climate, US Durable Goods Orders, US New Home Sales
Paul Bettany
Collinson Forex
Mobile 0406-744-923
paul@collinsonfx.com