April 25, 2024

Global Market Watch As Investors Brace For a Wild Week

A Relatively Quiet Start

It has been a quiet start to the week after a very slow weekend. After that, the main focus shifted to China’s People’s Congress, which set a less-than-expected GDP target for 2023. The growth target is 5.0%, despite the 6.0% initially predicted, which was the highest in 25 years.

In addition, the geopolitical tensions in Taiwan note the Chinese should take steps to defy the country’s independence and move on with reunification. China says there is an increase in defense spending from 7.1% to 7.2%.

Other geopolitical attention turns to involve the Iran Nuclear acquisition concerns. The IAEA said that Iran gave many assurances over their intention to open cooperation and mitigate risks. However, early on Monday, in an aim to pull Iran from the Western countries, Russia agreed to return Uranium to the country if their deal with the West countries collapses.

American Outlook from Policymakers

Mary Daly, a Fed non-voter, stated that further monetary tightening is important and rate hikes must continue for longer. Thomas Barkin, another non-voter, also noted that reducing inflation to 2% would take time, and returning to price stability would take more time and work in 2023.

The USD is drifting lower, with investors focusing on weekly data events and waiting for the NFP payrolls on Friday to see how hawkish the Fed will be. The EUR/USD is fluctuating around 1.0650 in the quiet trading area.

Dealers note that ECB policymakers would provide clarity beyond next week’s 50 bp rate hike. The USD/JPY trades below the 136 level as US bond yields move lower in the electronic trade. The focus is on BoJ’s policy decision on Friday, as the house will likely approve the new governor.

Other Global Economic Data

Sweden’s Q4 current account balance stands at SEK 85.0B, higher than the previous quarter’s value of SEK 43.2B, suggesting an improvement in Sweden’s trade balance.

The Feb CPI in Switzerland saw a 0.7% increase compared to January. The YoY increase in Feb was 3.4%, higher than market expectations. The Swiss Feb CPI harmonized consolidated with an increase of 0.5% compared to February 2022.

In Hungary, Jan retail sales decreased by 4.5% compared to January 2022. The value is lower than market expectations, forecasting a decrease of -2.9%. In Czech, the Q4 Average Real Monthly Wage came in at -6.7%, meaning that the real wage monthly bill decreased YoY.

The markets were expecting a worse value at -7.8%. At the same time, Germany’s construction PMI had a value of 43.3, indicating a contracting sector. The figure, however, suggests that contraction is less than what economists have predicted, which borders on good news.

The UK Feb new car registrations measure changes in cars being registered in the Uk and show a 26.2% uptick in new car buys in the country. The value is higher than January’s 14.7%, indicating an uptick in car demand in the one month. The Euro Zone Mar Sentix Investor Confidence came in at a value of -5.5, indicating that investors are becoming more pessimistic about the Eurozoe’s economy.

Markets expect the Euro Zone Jan Retail Sales to increase by 0.6%. The year-on-year value also dropped, missing analysts’ predictions. The week will be busy, and investors will make more pivotal portfolio decisions.

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