Weekly Market Commentary
US equity markets surged to close the week. The US and China finally agreed to sign a trade deal. This was 'Stage One' of a comprehensive deal, which will be tabulated and signed in the coming weeks. President Trump hailed the agreement as a huge success, but it is not the 'comprehensive' deal he had previously insisted upon. This is substantial and covers Agriculture, Financial Services and Intellectual Property. This provides $40 to 50 Billion in US agricultural exports and allows US Financial Institutions more access to Chinese markets. The announcement came after markets close but the deal was celebrated by US markets.
European markets surged after serious progress on both Brexit and the US/China trade war. Brexit negotiators were positive over a last minute Brexit deal, when the UK and Ireland look to have achieved a solution to the Irish border conundrum. EU negotiator, Michael Barnier, described Brexit talks as 'constructive' and British negotiator Stephan Barclay outlined a 'pathway to a possible deal'. The GBP surged to 1.2650, while the EUR traded 1.1040, as the deadline fast approaches.
Oil spiked on the close, to $54.75/barrel, after reports of a possible Saudi attack on an Iranian oil tanker. Meanwhile commodity currencies booked some gains resulting from the developments over US/China trade negotiations. The AUD looks to regain 0.6800, while the NZD pushed up to 0.6330, still awaiting the final details of the trade agreement. This should be great news for the trade exposed, commodity currencies but the devil is in the detail. The huge increase in US agricultural exports may be to the detriment of these countries?
Weekly Market Calendar
14/10 China Trade Exports/Imports, NZ House Sales, NZ Services PMI, EU Industrial Production, US Budget
15/10 NZ Migration, Australia Consumer Confidence, China CPI, Japan Industrial Production, UK Employment, German/EU ZEW Economic Sentiment, Empire State Manufacturing Index
16/10 NZ CPI, UK CPI, EU CPI, EU Trade, US Retail Sales
17/10 NAHB House Market Index, Fed's Beige Book, Employment, UK Retail Sales, EU Construction, US Building Permits, US Housing Starts, US Weekly Jobless Claims, Philly Fed Report, US Industrial/Manufacturing Production
18/10 RBA, ECB, Fed's Leaders in the US, Japan CPI, China GDP, China Industrial Production, China Retail Sales, EU Current Account, US Leading Index