Global equity markets ended mixed last week. UK markets ended the week in green, boosted by gains in commodity sector stocks. Additionally, UK’s manufacturing PMI surprised with a rise in March, while the nation’s services PMI fell more than market anticipation in the same month, reaching its lowest level since July 2016. Further, the construction PMI recorded a more-than-expected decline in March. European markets ended the week on a positive footing, buoyed by gains in automobile and financial sector stocks. In economic news, Euro-zone’s consumer price index (CPI) rose to its highest level in four months on an annual basis in March, while the region’s unemployment rate dropped to its lowest level since 2008 in February. Additionally, monthly retail sales rebounded in February. On the contrary, Euro-zone’s Markit manufacturing PMI dropped to a 8-month low level in March. Separately, Germany’s factory orders rebounded on a monthly basis in February, whereas the nation’s industrial production unexpectedly declined in February. US markets ended the week in negative territory, amid continuing trade tensions between the US and China. On the macroeconomic front, US private sector employment surprisingly advanced in March. Additionally, the average hourly earnings rose at par with market expectations on a monthly basis in March. Adding to the positive sentiment, the nation’s factory orders rebounded in February. On the other hand, the nation’s initial jobless claims rose for the week ended 30 March 2018, notching its highest level in three months. Further, the final Markit manufacturing PMI and the services PMI unexpectedly fell in March. Moreover, the trade deficit widened more than market forecast in February. The unemployment rate recorded a rise in March and non-farm payrolls dropped more-than-expected. Asian markets ended mostly lower last week, after the US President, Donald Trump indicated that more tariffs would be imposed against China, escalating trade war fears.


Currency Update


The EUR ended lower against the USD, after Euro-zone’s Markit services PMI dropped to a seven-month low level in March. The British Pound ended weaker against the greenback, after the UK’s Markit services PMI recorded a more-than-expected drop in March, reaching its lowest reading since July 2016. The US Dollar ended mostly higher against its major counterparts last week, as trade war fears between the US and China eased.



The US Fed Chairman, Jerome Powell’s economic outlook speech


The Federal Reserve (Fed) Chairman, Jerome Powell, in his first economic outlook speech indicated that the central bank raised its key rate by a quarter-point at its March meeting, just the sixth increase since late 2015. Powell gave a positive outlook on the US economy and signalled that the Fed remains committed to raising its benchmark interest rate gradually. Further, he stated that it was too soon to determine how a trade fight with China could affect the US economy.



The Week Ahead


Going forward this week, investors will keep a tab on the FOMC minutes, the US CPI, producer price index, monthly budget statement and average hourly earnings along with the US Michigan consumer sentiment index and JOLTS job openings for further cues. Also, UK’s NIESR gross domestic product estimate, trade balance, RICS house price balance, industrial and manufacturing production along with the Euro-zone industrial production and German trade balance will be on investors' radar.



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