Summary of the Past Week
US & NORTH AMERICAN Market Weekly Snapshot
Futures on major US indices closed in positive territory for the week. Nasdaq 100 and Dow Jones futures rose 2.05% and 3.19% this week. S&P 500 futures added 2.54% for the week.
In the Cash Markets, the DJIA and the S&P 500 rose more than 1% on Friday. The Nasdaq Composite inched up 0.61% to close at 7,472.41. The DJIA and the Nasdaq Composite posted their eighth consecutive weekly gain.
China’s President Xi Jinping said trade talks between the U.S. and China will continue next week in Washington. This comes after a U.S. trade delegation led by Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer was in Beijing this week. Meanwhile, according to market sources, the U.S. President is considering pushing back the deadline for imposition of higher tariffs on Chinese imports by 60 days.
U.S. President Donald Trump on Friday declared a national emergency in a bid to fund his promised wall at the U.S.-Mexico border without congressional approval, an action Democrats vowed to challenge as a violation of the U.S. Constitution.
President Trump on Friday also signed a bipartisan government spending bill that would prevent another partial government shutdown by funding several agencies.
On the economic front, Industrial Production (MoM) for January released on Friday came in at -0.6%. The Production change was below the market expectation of a growth of 0.1%. The Federal Reserve said that the industrial production fell in January for the first time in eight months. In addition, the NY Empire State Manufacturing Index for February also out on Friday came in at 8.80. The index reading was above the market expectation of 7.10.
In news related to Oil Markets, the Baker Hughes Oil Rig Count also released on Friday came in at 857 for the week ended 15th Feb. The Oil Rig Count was 854 in the previous week.
On the economic front, Retail Sales (MoM) for December released on Thursday came in at -1.2%. It was the biggest monthly drop in sales since September 2009, according to the Commerce Department. The department also said retail sales fell 0.9% in December when excluding gasoline station sales.
The EIA said in a weekly report on Wednesday that U.S. commercial crude oil inventories rose by 3.633 million barrels for the week ended 8th Feb. The markets had expected that the EIA would report a 2.668 million barrel rise in US crude inventories for the week. Previously, the EIA reported that U.S. crude inventories rose by 1.263 million barrels for the week ended Feb 1.
Tuesday & Monday
The API reported on Tuesday that U.S. crude inventories fell by 0.998 million barrels for the week ended Feb 8. Previously, the API reported that U.S. crude supplies rose by 2.514 million barrel for the week ended Feb 1.
On the economic front, JOLTs Job Openings for December released on Tuesday came in at 7.335M. Openings were above the consensus estimates of 6.900M.
European & Asian-Pacific Weekly Markets Snapshot
Futures on major European indices closed in positive territory for the week. CAC 40 and DAX 30 futures rose more than 3% for the week. FTSE 100 futures advanced 2.12% for the week.
European equities closed higher on Friday on the back of China-U.S. trade talks. A fresh round of long-term loans from the European Central Bank to euro zone banks is being discussed, ECB board member Benoit Coeure said in New York on Friday.
Spain’s Prime Minister Pedro Sanchez called a snap general election on Friday. Spaniards will go to the polls on April 28. This comes after parliament rejected PM Sanchez minority government’s 2019 budget proposal.
The UK Parliament rejected PM Theresa May’s strategy to withdrawal from the European Union. It voted down a motion that reiterated the government’s plan to seek changes to the so-called Irish backstop, which is the contentious plan to avoid a hard border in Ireland.
On the economic front, U.K. Retail Sales (MoM) for January released on Friday came in at 1%. Sales change was above the market expectations of 0.2%.
On the data front, the preliminary reading of German GDP for the fourth quarter was released on Thursday. The QoQ rate of change in the GDP was 0.0%. The GDP growth was below the market expectations. In addition, the preliminary reading of Eurozone GDP for the fourth quarter was also released on Thursday. The QoQ rate of change in the GDP was +0.2%. The GDP growth was in line with the market expectations.
On the data front, U.K. GDP (Preliminary reading) for the fourth quarter was released on Monday. The QoQ rate of change in the GDP was +0.2%. The GDP growth was below the market expectations. In addition, U.K. Manufacturing Production for December also released on Monday came in at -0.7%. The Production change was below the consensus estimates.
Futures on major Asia-Pacific indices ended in positive territory for the week. Nikkei 225 and SPI 200 futures rose about 5% and 1% respectively for the week. On the other hand, Hang Seng futures lost 0.48% for the week.
Asia-Pacific markets closed lower on the last trading day of the week
On the economic front, China’s CPI (YoY) for January released on Friday came in at 1.7%. The CPI growth was below the market expectations of 1.9%. In addition, the Japanese Industrial Production (MoM) for December also out on Friday came in at -0.1%. The Production change was in line with the market expectations.
On the economic front, the preliminary reading of Japanese GDP for the fourth quarter was released on Thursday. The QoQ rate of change in the GDP was +0.3%. The GDP growth was below the market expectations.
Asia-Pacific markets hit a more than four-month high on Wednesday. On the interest rate front, the Reserve Bank of New Zealand kept its cash rate unchanged at 1.75% in its interest rate decision on Wednesday.
WEEKLY FOREX UPDATE
The pound edged higher on Friday as strong British retail sales lifted sentiment, though investors were considering the consequences of a Brexit vote defeat in parliament for PM May.
The U.S. dollar rose modestly on Wednesday after a measure of inflation excluding energy prices rose, prompting the greenback to reverse the prior day’s pullback.
The dollar held at a two-month high and the Australian dollar gained on Tuesday as expectations of progress in trade talks between the U.S. and China and a tentative deal to avoid a U.S. government shutdown lifted sentiment.
The Pound weakened on Monday after data showed that Britain’s economy last year grew at its slowest since 2012, with Brexit uncertainty hitting investment and the slowdown accelerating at the end of 2018.
WEEKLY CRYPTOCURRENCY UPDATE
Bitcoin fell around 1% for the week ended on 15th Feb (Friday). Dash added around 7% for the week. Ethereum climbed 3% (approx.) for the week.
Top 5 Cryptocurrencies by Market Capitalization on 16th Feb are- Bitcoin, Ethereum, Ripple (XRP), EOS and Litecoin.
In major news within the Cryptocurrency Markets, Coinbase, the largest US-based cryptocurrency exchange, is finally allowing users to withdraw bitcoin Satoshi vision (BSV) – the cryptocurrency created in a hard fork of the bitcoin cash blockchain on 15th Nov. The exchange users who held bitcoin cash in their accounts at the time of the fork were given BSV coins at a 1:1 ratio, and it also notified its users on Thursday that their BSV balances could now be accessed.
In other major news, Mitsubishi UFJ Financial Group announced on Wednesday that it is launching a blockchain-based payments network next year. The firm said that it has formed a joint venture with U.S.-based fintech firm Akamai Technologies to develop the platform “by the first half of 2020.”
WEEKLY COMMODITY MARKET UPDATE
Gold rose to a two-week high on Friday after weak U.S. economic data boosted expectations the U.S. Federal Reserve would hold pat on monetary tightening. The yellow metal prices was range bound for most of the week. Gold gained 0.5% on Thursday after weak U.S. retail sales data added to disquiet about slowing growth, which could prompt the Fed to hold interest rates steady for a while. The metal was little changed on Wednesday, holding above the $1,300 level as the dollar retreated from a two-month peak on hopes of a U.S.-China trade deal, while rising global equities kept the metal’s gains in check.
Silver rose about 1% on Friday to end the week at $15.710 per ounce. The metal inched down 0.19% for the week.
Crude Oil prices rose more than 2% to their highest this year on Friday after an outage at Saudi Arabia’s offshore oilfield boosted expectations for tightening supply, while progressing U.S.-Sino trade talks strengthened demand sentiment. For the week, Brent ended more than 6% higher and WTI gained more than 5%, partly on tightening supplies since the OPEC and its allies led by Russia started voluntary production cuts last month. Saudi Arabia said on Tuesday that it would cut an additional half a million bpd in March more than it previously pledged.
The Week Ahead (18th-22nd February)
The U.S. and China will resume trade talks next week in Washington with time running short to ease their bruising trade war. U.S. President Donald Trump, however, said on Friday (15 Feb) that he may extend a March 1 deadline for a deal and keep tariffs on Chinese goods from rising.
The Federal Reserve will release minutes from the last meeting at 2 pm ET on Wednesday. Investors are watching the release of its meeting minutes for any sign the Fed could veer off its easy path.
The German Manufacturing PMI (Preliminary reading) for February is scheduled to be released on Thursday. The PMI reading is expected to rise to 50.0 from 49.7 in the previous month.
The French Manufacturing PMI (Preliminary reading) for February is scheduled to be released on Thursday. The PMI reading is expected to fall to 51.0 from 51.2 in the previous month.
Saudi Crown Prince Mohammed bin Salman begins two-day trip to China on Thursday. He is expected to meet with China’s President Xi Jinping.
The Japanese Manufacturing PMI (Preliminary reading) for February is scheduled to be released on Wednesday. The PMI reading is expected to rise to 50.4 from 50.3 in the previous month.
MAJOR COMPANIES EARNINGS CALENDAR
Monday- Reckitt Benckiser
Tuesday– BHP Billiton, Walmart
Wednesday– CVS Health, Lloyds
Thursday– Go-Ahead, Hays, Barclays, Hewlett Packard Enterprises
Friday- Royal Bank of Canada, AutoNation
Important Economic Releases (18th-22nd February)