Global equities ended mostly higher last week. UK markets ended in the positive territory last week, boosted by gains in energy sector stocks, after the OPEC and other oil producers agreed to a moderate rise in crude output. On the data front, UK’s public sector net borrowings fell more than market forecast in May, marking its lowest level since 2005. Additionally, UK’s CBI total trend orders rebounded in June. European markets finished in the red during the week, weighed down by losses in automobile and financial sector stocks. Data indicated that the Eurozone’s consumer confidence index unexpectedly dropped to its lowest reading since October 2017 in June. Additionally, current account surplus declined to a 10-month low level in April. Moreover, the Markit manufacturing PMI fell in line with market expectations in June, while the services PMI surprisingly advanced in the same month. Separately, Germany’s Markit manufacturing PMI dropped to an 18-month low level in June, whereas the services PMI rose to a 4-month high level in the same month. US markets ended the week lower, amid ongoing trade worries. On the macro front, US housing starts jumped to a 11-month high level in May. Moreover, the MBA mortgage applications advanced the most in more than five months in the week ended 15 June 2018. Additionally, the US jobless claims slid more than market anticipations in the week ended 16 June 2018. On the contrary, the nation’s current account deficit widened less than market forecast in the first quarter of 2018. Also, existing home sales unexpectedly declined for a second straight month on a monthly basis in May. Moreover, monthly building permits fell in May, recording its lowest level since September 2017. Asian markets finished lower during the week.


Currency Update


The EUR ended firmer against the USD, amid improved economic growth data and amid assurances by the Italian government to stay in the single currency region. The British Pound ended weaker against the greenback. The US Dollar ended mostly lower against its major counterparts last week, amid renewed trade worries between the US and European Union.



BoE Minutes: Split vote signals August rate hike


The Bank of England (BoE), at its June monetary policy meeting, opted to keep the benchmark interest rate steady at 0.50% in a split vote while all nine officials voted to maintain its asset purchase facility at £435.0 billion. Meanwhile, the BoE’s Chief Economist, Andy Haldane unexpectedly supported the hawks calling for an immediate interest-rate increase, defying the majority of policymakers who voted to keep the rate unchanged. The minutes of the meeting revealed that policymakers expect any future increases in the rate to be at a gradual pace and to a limited extent.



The Week Ahead


Going ahead this week, market participants will watch the US gross domestic product (GDP), consumer confidence index, MBA mortgage applications and durable goods orders along with advance goods trade balance and the US Michigan consumer sentiment index for further indication. Additionally, UK’s GDP, GfK consumer confidence index and net consumer credit along with the Eurozone’s consumer price index (CPI), economic and consumer confidence index, Germany’s Ifo survey indices, GfK consumer confidence index, CPI and unemployment rate will attract significant investor attention.



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