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20180318 -

Mar, 18th 13:18

GLOBAL MARKET WEEKLY REPORT

U.S. MARKET WEEKLY SNAPSHOT

Summary for the week

Stocks fell modestly for the week after a Friday rally broke a four-day losing streak for the Standard & Poor’s 500 Index and partially compensated for earlier losses. Small- and mid-caps outperformed larger shares. Within the S&P 500, utilities and real estate shares fared best, helped by a decline in longer-term Treasury yields, which make their healthy dividend payments more attractive in comparison.

U.S. stocks ended modestly higher Friday, with the S&P 500 breaking a four-day losing streak after mostly upbeat economic data, though major indexes still suffered hefty weekly declines. For the week, the Dow fell 1.5%, the S&P lost 1.2%, and the Nasdaq declined 1%.

Stocks took a hit this week largely due to persistent worries about a potential global trade war, particularly between the U.S. and China, as the Trump administration’s pushes for protective levies.

Data released this week showed a jump in import prices, which revived some inflation concerns. However, other data, such as in-line retail sales, helped firm up the overall view that the economy isn’t overheating and no more than three interest-rate hikes will be needed this year.

Weekly Change U.S. Major Indices

EUROPEAN AND ASIA-PECIFIC WEEKLT MARKET OUTLOOK

European equities ended the week mixed amid relatively low trading volumes, disappointing inflation numbers for the eurozone, and political uncertainty about the prospects of a trade war and other geopolitical tensions. At the start of the week, the pan-European benchmark STOXX 600 gained ground following the strong U.S. jobs report the week before. Germany’s DAX 30, Spain’s IBEX 35, and France’s CAC 40 all trended higher.

Meanwhile, the European Central Bank (ECB) signaled that it would continue its monetary policy and that it would have to have more confidence that inflation was rising before ending net asset purchases. Eurozone industrial production fell 1.0% in January compared with the month before.

In Asia, equities finished the session relatively mixed amid heightened fears of a global trade war. U.S. stocks posted solid gains around Europe’s market close, although market movements suggested they were heading for a loss on the week.

The major Japanese stock market benchmarks rose for the week. The bellwether Nikkei 225 Stock Average ended the week at 21,676.51, a modest 0.97% gain over the prior week. The Nikkei average has lost 4.78% since the beginning of 2018. The large-cap TOPIX Index rose 1.23% for the week but ended Friday down 4.45% for the year to date.

China announced that it would merge its banking and insurance regulators, a long-awaited move that aims to tighten control of the country’s financial sector and curb the risks that have accompanied years of rapid credit growth.

Under a proposal released at the country’s annual legislative meeting, Beijing plans to merge the China Banking Regulatory Commission and the China Insurance Regulatory Commission. The People’s Bank of China (PBOC), the central bank, will gain new powers to draft financial sector regulations, in addition to determining monetary policy.

Major Indices Weekly Change

WEEKLY FOREX UPDATE

The dollar proved to be a quiet achiever this week, racking up its longest weekly winning streak in five months.

The U.S. dollar held on to its gains after climbing higher in the wake of stronger-than-expected economic data, reversing a previous loss that had the buck trading at a nine-day low. This move also led to some of its rivals to weaken, including the euro, which had already been knocked by eurozone inflation data that was cooler than expected.

On the week, the index gain 0.1%, marking it its fourth weekly gain in a row.

The euro EURUSD, down 0.1219% fetched $1.2285, compared with $1.2306 on Thursday, representing a weekly loss of 0.2%.

The British pound GBP/USD, up 0.0574% was little changed at $1.3942, versus $1.3936 on Thursday, having rallied 0.7% on the week.

Against the Canadian dollar USD/CAD, up 0.3140% the greenback jumped to C$1.3097—a fresh near nine-month high—up from C$1.3056 late Thursday. At a 2.2% drop this week, the Canadian dollar was the worst performer of this group.

Major Currencies Weekly Change

WEEKLY CRYPTOCURRENCY UPDATE

Bitcoin (BTC) may see a corrective rally following losses this week, but it’s still too early to call a bottom, the technical charts indicate.

The cryptocurrency has spent a better part of the last 24 hours trading in a roughly sideways manner in the narrow range of $7,900-$8,400.

The consolidation may have brought a little to the battered bulls and suggests a temporary low is in place at $7,676. Further, the shorter duration technical charts (prices as per Bitfinex) show potential for a relief rally.

Ethereum markets fell again during the week, as crypto currency markets in general have been getting pounded. We are testing a very serious support level on the longer-term charts, so this could be an interesting market to watch.

Top 5 Cryptocurrencies Weekly Change

WEEKLY COMMODITY MARKET UPDATE

Crude oil: Oil and gas was the strongest performing industry, with the sector closing up 1.46 percent on the back of a sharp rise in oil prices. At the market close, Brent traded at $65.93, while U.S. crude hovered around $62.17.

Gold: Gold prices moved lower sliding through support levels, as a stronger dollar eroded the value of the yellow metal.  This comes despite a softer than expected housing starts report, which weighed on U.S. yields. Softer than forecast inflation data reported in the Eurozone on Friday, paved the way for lower gold prices.

Silver: Silver markets were negative during the week, but at this point we remain well within the consolidation area that we have been in for some time.

Copper: Copper prices fell on Friday as the dollar strengthened ahead of next week’s Federal Open Market Committee meeting, at which the U.S. central bank is expected to raise interest rates for the first time this year. A stronger greenback makes metals more expensive for holders of other currencies and can weigh on prices.

Natural Gas: Natural gas markets initially tried to rally during the week but then rolled over at the $2.82 level. Ultimately, this is a market that showed exhaustion, so I think that the markets will eventually find support underneath.

Major Commodities Weekly Change

The Week Ahead (12th-16th march):

In Dow Jones 30 the 25,000 level continues to be a bit of a magnet for price. Investors are also looking ahead to the Federal Reserve’s monetary-policy meeting next week. The fed-fund futures market is betting there is a 91.6% chance of a 0.25 percentage point rate increase on March 21, according to CME Group data.

While the Fed is expected to raise short-term interest rates, investors will focus on the accompanying press release, which may give additional information regarding the number of rate hikes it expects for the remainder of the year.

The week begins quietly, although with the UK/Russia controversy still a developing story, we could get news on this front.

Major data from the UK includes consumer price index (CPI), employment data and the Bank of England (BoE) meeting, while we also get the Federal Reserve (Fed) meeting, at which the committee is expected to raise rates once again.

Germany (DAX) will continue to go higher, and that the €12,000 level continues to be supportive.

In cryptocurrency BTC/USD finds a massive support level that seems to be forming between $6000 on the bottom, and the $8000 level on the top. A breakdown below the $6000 would be extraordinarily negative.

In ETH/USD break down below the $550 level, it’s very likely that the market will continue to go lower, perhaps looking towards the $500 level first, and then the $400 level after that. If market bounces from here, it can probably see resistance at the $700 level. Uptrend may continue in this week.

In commodity market if Gold prices will break above the $1350 level, the market probably goes to the $1400 level. Short-term pullbacks offer buying opportunities. If the market breaks down below the $1250 level, that would be a very negative sign. Beyond that, the market has the possibility of significant geopolitical headlines crossing the wires, and that of course will push this market much higher as gold can be thought of as a safety haven occasionally. With the trade war possibility coming out, it’s likely that gold could get a bit of a bid because of that as well.

Silver may reach towards the $17 level. A break above will send the market looking towards the $17.50 level, and then eventually the $18.50 level beyond that.

Natural gas is certainly going to struggle with the weather getting warmer in the United States, and of course the inventory numbers being more bearish than anticipated. The $2.50 level underneath continues to offer support.