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Global equity markets ended mostly higher last week. UK markets ended the week in positive territory, boosted by gains in financial and commodity sector stocks and amid weakness in the British Pound. On the data front, UK’s unemployment rate surprisingly dropped in the December-February period, marking its lowest level since comparable data began in 1971. Additionally, the producer price index rose higher than market expectations on an annual basis in March while, the nation’s annual consumer price inflation eased to its lowest level in one year in March. Moreover, the average weekly earnings including bonus rose at a weaker than expected pace for the three months to February. Further, the nation's retail sales declined more than market anticipations on a monthly basis in March. European markets ended the week on a positive footing, buoyed by gains in energy and industrial sector stocks. Data revealed that Eurozone’s consumer confidence index surprisingly climbed in April. On the contrary, the region’s current account surplus narrowed in February. Additionally, the ZEW economic sentiment index recorded a decline in April. Moreover, the region’s construction output dropped on a monthly basis in February. Furthermore, the region’s annual consumer prices rose less-than-expected in February. US markets ended the week in the green, amid optimism over strong corporate earnings reports. On the macro front, the US advance retail sales advanced in March, marking its first rise in three months. Additionally, monthly industrial production rose more than market forecast in March. Meanwhile, the nation’s initial jobless claims fell less than market expectations in the week ended 14 April 2018. Asian markets ended mostly higher last week, tracking gains in their US counterparts.

 
     

Currency Update

 

The EUR ended lower against the USD, amid a slew of disappointing economic releases. The British Pound ended weaker against the greenback, following dismal economic reports as well as the Bank of England Governor, Mark Carney’s dovish comments on the path of UK interest rates. The US Dollar ended stronger against its major counterparts last week, following robust US earnings report.

 
 

 

Fed's Beige Book: US economic activity remained at a modest-to-moderate pace

 

According to the Federal Reserve’s Beige Book report, economic activity in the US expanded at a ‘modest to moderate’ pace in March and early April. However, businesses expressed concerns over widening global trade disputes and newly introduced trade tariffs. Further, firms reported solid business borrowing, continued robust job growth as well as rising consumer spending in the US economy.

 
 

 

The Week Ahead

 

Moving forward this week, investors will closely watch the European Central Bank's rate decision, Markit manufacturing and services PMI across the Eurozone along with Germany’s Ifo sentiment indices, BBA home loans and GfK consumer confidence index for further indication. Further, the US Markit consumer confidence index, MBA mortgage applications, initial jobless claims, advance goods trade balance, manufacturing and services PMI along with UK’s public-sector net borrowing and CBI total trend orders would garner significant market attention.

 
 

 
 

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