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Global equity markets ended mostly higher last week. UK markets ended the week in negative territory. On the macro front, UK’s construction PMI surprisingly climbed in June, recording its highest level since November 2017. Moreover, the manufacturing PMI surprised with a rise in June. Further, the services PMI rose at its fastest pace in eight months in June. Also, monthly Halifax house price index advanced more than market forecast in June. European markets ended the week on a positive footing, after the German Chancellor, Angela Merkel reached a deal over the country’s migration policy. Data indicated that the Eurozone’s Markit services PMI rose in June, notching its highest level in seven years. Moreover, the annual producer price index (PPI) accelerated more-than-expected in May, recording its strongest level since May 2017. Also, unemployment rate dropped to a nine-year low rate in May. Meanwhile, the region’s manufacturing PMI dropped to an eighteen-month low level in June. Separately, Germany’s services PMI advanced more-than-anticipated to its highest level in four months in June, while manufacturing PMI recorded a drop in the same month. Meanwhile, seasonally adjusted industrial production climbed more than expected in May. US markets ended in the green last week, led by gains in technology sector stocks and amid upbeat non-farm payrolls data. On the data front, the US ISM manufacturing PMI surprisingly jumped to its highest level in 4 months in June. Additionally, factory orders rebounded in May. Further, trade deficit narrowed more-than-anticipated to a 19-month low level in May. On the other hand, the nation’s initial jobless claims unexpectedly advanced to a six-month high level in the week ended 30 June 2018. Moreover, unemployment rate unexpectedly climbed in June. Average hourly earnings rose less than market forecast on a monthly basis in June. Asian markets ended mostly lower last week, amid global trade war fears.

 
     

Currency Update

 


The EUR ended firmer against the USD, after the German Chancellor Angela Merkel clinched a deal on migration. The British Pound ended stronger against the greenback, following a spate of upbeat economic data and after the Bank of England, Governor, Mark Carney boosted August rate hike expectations. The US Dollar ended weaker against its major counterparts last week, following an unexpected increase in the US unemployment rate and slow wage growth in June.

 
 

 

FOMC June meeting minutes highlighted global trade war concerns, reaffirmed rate hike expectations

 


According to the Federal Reserve (Fed) June meeting minutes, officials expressed concerns over negative risks from the US trade policy. However, the Fed reaffirmed gradual rate hike expectations and maintained the bank’s outlook for three rate hikes in 2019.

 
 

 

The Week Ahead

 


Going ahead this week, market participants will closely watch the US CPI, consumer credit, JOLTS job openings, PPI and monthly budget statement for further indication. Additionally, Germany’s trade balance, ZEW survey indices, CPI and Eurozone’s industrial production along with UK’s trade balance, NEISR GDP, industrial and manufacturing production will attract significant investor attention.

 
 

 
 

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