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Global equity markets ended mostly lower last week, amid ongoing geopolitical tensions. UK markets ended lower last week. On the macro front, UK’s Markit services PMI jumped more than market expectations in May. Additionally, the Halifax house price index advanced more than market forecast on a monthly basis in the same month. European markets ended mixed in the previous week. On the data front, Eurozone’s Markit services PMI dropped more-than-anticipated in May. Further, monthly retail sales rose less-than-anticipated in April, marking its third consecutive gain in turnover. Furthermore, the region’s Sentix investor confidence index declined more than market forecast in June, reaching its lowest level since October 2016. Additionally, the nation's gross domestic product (GDP) rose in the first three months of 2018, meeting market expectations. Separately, Germany’s Markit services PMI slid to its lowest level since September 2016 in May. Additionally, the nation’s trade surplus narrowed in April. US markets ended the week in green, buoyed by gains in technology sector stocks. Data indicated that the US trade deficit unexpectedly narrowed to a seven-month low level in April. Moreover, the Markit services PMI climbed more than market anticipations in May, reaching its highest level in more than three years. Additionally, US JOLTS job openings surprisingly advanced in April. On the contrary, the nation’s durable goods orders recorded a drop in April. Meanwhile, the nation's factory orders declined more-than-expected in the same month. Asian markets closed higher last week, following gains in the US markets.

 
     

Currency Update

 


The EUR ended firmer against the USD, amid expectations that the European Central Bank (ECB) might end its massive bond-buying program by the end of this year. The British Pound ended stronger against the greenback, following upbeat services PMI data for May.

 
 

 

ECB likely to put a halt to its bond buying era

 


The ECB Chief Economist, Peter Praet, hinted that the central bank will discuss, at its policy meeting this week, on when to start winding down its €30 billion monthly bond-buying programme. Further, he added that the underlying strength in the economy remains intact and inflation expectations were increasingly in line with the bank’s target.

 
 

 

The Week Ahead

 


Going ahead this week, market participants will keep a tab on the FOMC interest rate decision and the ECB rate decision along with Eurozone’s industrial production, trade balance, consumer price index (CPI) and Germany’s Ifo indices and CPI for further cues. Also, UK’s NIESR GDP estimate, trade balance, ILO unemployment rate, CPI, industrial and manufacturing production along with the US monthly budget statement, retail sales, manufacturing and industrial production will attract significant investor attention.

 
 

 
 

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