The Week Ahead: China GDP and Inflation data in an Easter shortened trading week


News of positive earnings reports from JPM and Wells Fargo, plus stronger-than-expected data out of China helped lift investor sentiment on Friday, ensuring that Wall Street enjoyed a solid end to the week. The S&P500 closed with a 0.7% gain, above 2900 for the first time since October and less than 1% below the all-time high. The 10-year US Treasury yield climbed 7bps to 2.57% – now 20bps above last month’s low. In currency markets, as usual, the more positive tone resulted in stronger commodity dollars with AUD leading the way, with less demand for JPY and CHF. 

Last week was obviously another tumultuous one for the Brexit process with much midnight oil being burnt in Brussels.   IMF’s Christine Lagarde successfully summed things up after the UK was granted a compromise six month extension when she said this delay avoids the ‘terrible outcome’ of a no-deal solution, but does not lift the uncertainty over the final outcome. There are still so many possible conclusions - we may see a general election, another referendum (though time is tight) or even more indicative votes. The betting markets have a PM departure around July ahead of the Conservative Party conference and yet if the landscape doesn’t actually change that much, stockpiling and no-deal risks will ratchet up once more into the new exit date.

More importantly, financial markets didn’t blink at all with cable printing the narrowest range week this year, up a measly 0.25%. The hope is that traders can move on as markets are likely to focus on things other than Brexit now.

In which light, UK data this week may take on enhanced significance given the lowered risks of a hard Brexit, pushed out timelines and Parliament's Easter recess.

Below is a preview of what to look out for across global markets this week:

Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warrant that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, the author does not guarantee its accuracy or completeness, nor does the author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

The trading of Foreign Exchange, and other leveraged products involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Before deciding to trade forex, commodity or Index based CFDs you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that Capital Index (UK) Ltd is not rendering investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters.