|Asset||Current Value||Weekly Change|
|WTI Crude Oil||49.61||-8.12%|
Global stock markets had an unusually mixed week as European equities were under pressure before the close French presidential election. The latest polls showed a welcome gain for the favored candidate Macron, who will most likely face Marine Le Pen in the second round. Amid the European tensions, the major US benchmarks ended the period higher, with technology stocks leading the way once again. Japanese stocks were helped by the correction in the Yen, while British equities lost ground following Theresa May’s surprise announcement about a snap UK election in June.
Monthly progress of the main global indices, Comparison Chart (% gains)
Oil turned lower after two bullish weeks, and WTI Crude plunged back below the $50 per barrel level towards the end of the week, as the jawboning of some of the OPEC nations was overshadowed by the gloomy fundamental picture. Gold also declined during the week, although because of different reasons, as safe-haven assets retreated from their recent highs despite the continued verbal battle between North Korea and the US. As Donald Trump turned surprisingly active on geopolitical issues, he put pressure on China to take up a role in dealing with the “Korean problem”. If the superpowers finally decide to neutralize the communist leadership in one form or another, markets will likely experience another risk-off period.
Cryptocurrencies had a consolidation week as most of the major altcoins were trading in ranges throughout the period. Ethereum, Ripple, Litecoin, and Monero all traded without a clear direction, although Ripple and Litecoin remained way more volatile following their strong moves. Bitcoin enjoyed a bullish move following the Easter weekend, as it broke the $1215 resistance and touched $1250 on Friday for the first time in more than a month. Ethereum Classic and NEM were among the major movers on the upside, while Dash drifted lower after hitting level $75 again.
Economic numbers were also mixed, but the most awaited releases were mostly negative surprises. US data took a nosedive, with the Philly Fed Index, Housing Starts, and Capacity Utilization all missing the consensus estimates. British Retail Sales were also much worse than expected, putting further pressure on the local market. The Eurozone PMIs were a relatively bright spot, and Chinese Industrial Production gave some hope to investors that the slowdown in the country is, at least, contained.
The NASDAQ has retained its leading role among the global benchmarks, despite the recent geopolitical fears, as it got very close to hitting a new all-time high, “under the radar”. The DAX decoupled from the NASDAQ in recent weeks, as European traders took a cautious stance before the French election. The tech benchmark is in a slightly advancing trend channel that defines the consolidation zone below the April highs.
The US Tech Index, 4-Hour Chart
The 5500 level might be in the focus in the coming week, especially if the week begins with a relief rally after the elections. Primary support is found at 5400, while the low from last week near 5350 cold provide short-term support as well, with a more important level near 5315. The relative strength of the index is a bullish sign for the broader market, as the NASDAQ is usually a good indicator of the risk appetite of traders.
Key Economic Releases of the Week
|Tuesday||US||Building Permits||1.26 million||1.25 million||1.22 million|
|Tuesday||US||Housing Starts||1.22 million||1.25 million||1.30 million|
|Wednesday||US||Crude Oil Inventories||–||-1 million||-2.2 million|
|Thursday||US||Philly Fed Index||22.0||25.6||32.8|
|Thursday||US||BOE Governor Carney Speech||–||–||–|
|Friday||US||Existing Home Sales||5.71 million||5.61 million||5.48 million|
|Thursday||CANADA||Building Permits (monthly)||-2.50%||–||5.40%|
|Thursday||US||Initial Jobless Claims (weekly)||234,000||251,000||258,000|