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Global equity markets ended mostly firmer last week. UK markets ended the week in green, as the British Pound weakened, after the Bank of England (BoE) downgraded its forecasts for UK’s economic growth and inflation. On the macro front, UK’s NIESR gross domestic product (GDP) registered an advance in April. Meanwhile, the nation’s industrial production recorded a lower-than-expected rise on a monthly basis in March and monthly manufacturing production dropped for the second straight month in the same month. Additionally, the Halifax house price index registered a more-than-anticipated decline on a monthly basis in April, marking its biggest drop since September 2010. Moreover, trade deficit widened more than market expectations in March. Further, the BRC like-for-like sales fell more than market forecast in April. The European markets ended the week on a positive footing, amid M&A news. Data indicated that Eurozone’s Sentix investor confidence index unexpectedly dropped in May, reaching its lowest level since February 2017. Separately, Germany’s trade surplus widened more than market anticipations in March. US markets ended the week in positive territory, buoyed by gains in energy and technology sector stocks. On the data front, the US NFIB small optimism index surprisingly climbed in April. Additionally, JOLTS job openings advanced more than market expectations in March, reaching its highest level since the data series started in December 2000. On the flipside, the nation’s consumer price index (CPI) rose less than expected on a monthly basis in April. Moreover, consumer credit declined to a six-month low level in March. Additionally, monthly budget surplus widened more-than-anticipated in April. Asian markets closed higher last week.

 
     

Currency Update

 

The EUR ended lower against the USD, after Eurozone’s Sentix investor confidence index unexpectedly declined in May, marking its lowest level since February 2017. The British Pound ended stronger against the greenback. The US Dollar ended weaker against its major counterparts last week, following a weaker-than-anticipated US inflation data.

 
 

 

BoE kept its benchmark interest rate on hold,
slashed its outlook on inflation and growth

 

The BoE's Monetary Policy Committee kept its benchmark interest rate steady at 0.50%, amid a slump in first-quarter economic growth. According to the minutes of the meeting, officials believed that the recent slowdown in economic activity would be temporary but cautioned the economy over Brexit uncertainties. Further, the central bank downgraded its 2018 growth forecast from a moderate 1.8% to a modest 1.4%, due to weak first-quarter growth and added that inflation will slow faster than previously estimated.

 
 

 

The Week Ahead

 

Going ahead this week, investors will closely watch Eurozone’s GDP, industrial production, CPI, trade balance and current account balance along with Germany’s GDP, ZEW survey indices and CPI for further direction. Also, UK’s claimant count rate, average weekly earnings and ILO unemployment rate along with the US advance retail sales, the NAHB housing market index, business inventories, manufacturing production and initial jobless claims will be on investors' radar.

 
 

 
 

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