Global equity markets ended mostly weaker last week, after the US President, Donald Trump, announced that he would impose tariffs on steel and aluminium imports from the European Union, Canada and Mexico. UK markets ended the week in negative territory, led by losses in the financial sector stocks. On the data front, UK’s monthly Nationwide house price index unexpectedly declined in May. On the contrary, the nation’s net consumer credit advanced in April, notching its highest level since November 2016. Moreover, the consumer confidence index climbed more than market forecast in May, reaching its highest level since May 2017. Further, the Markit manufacturing PMI surprised with a rise in May. European markets ended the week on a negative footing, amid poltical tensions in Italy. Data indicated that, Eurozone’s economic confidence index recorded a drop in May. Additionally, the final Markit manufacturing fell to a 15-month low in May. Meanwhile, the region’s unemployment rate declined in April, reaching its lowest rate since December 2008. Separately, Germany’s Markit manufacturing PMI slid in May, reaching its lowest level in last 15 months. US markets ended the week mixed. On the macro front, the US gross domestic product (GDP) grew slower than market forecast in the first three months of 2018. Moreover, the ADP employment change rose less-than-expected in May. Further, the MBA mortgage applications declined in the week ended 25 May 2018, marking its lowest reading since January 2016. On the flipside, the nation’s consumer confidence index advanced to a three-month high level in May. Additionally, advance goods trade deficit unexpectedly narrowed to a six-month low level in April. Also, the nation’s unemployment rate slid to 18-year low level in May. Monthly construction spending jumped more than market expectations in April, marking its largest gain since January 2016. Asian markets ended weaker last week.


Currency Update


The EUR ended firmer against the USD.
The British Pound ended stronger against the greenback, after the UK’s manufacturing PMI surprised with a rise in May.
The US Dollar ended lower against its major counterparts last week, as the US economy grew at a slower-than-expected pace in the first quarter of 2018.



Fed's Beige Book: US economy on “moderate” growth track, manufacturing sector gaining momentum


According to the Federal Reserve’s Beige Book report, the US economy expanded moderately from late April to early May. Further, it indicated that most districts reported a pickup in manufacturing activity. However, concerns over the Trump administration’s trade policies clouded the business outlook.



The Week Ahead


Going ahead this week, investors will closely watch the US services PMI, JOLTS job openings, MBA mortgage applications, trade balance, initial jobless claims and consumer credit along with UK’s construction and services PMI for further cues. Additionally, Eurozone’s GDP, producer price index, services PMI and retail sales along with Germany’s services PMI, trade balance and industrial production will be on investor’s radar.



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