By Deepta Bolaky
Messy Brexit Week
It was a calmer week for Wall Street. The Volatility Index was at its lowest since October 2018. However, the momentum slowed down and the US shares took a breather on Thursday whereby we saw a quieter session amid a lack of drivers to push the rally.
In the Asian markets, trading was choppy during the last few days. The data we received this week provided more insights into the Chinese economy. Looking at the graphs, we can see that the slowdown in China continues. It has deepened since the beginning of the year despite the stimulus measures. Now, the question is how will policymakers respond to the weaker expansion in the Industrial Production and Retail Sales.
US shares have been pretty much resilient throughout the week as muted CPI figures reassured investors that the Fed would stay patient while at the same time, economic data was quite solid boosting confidence that the US economy is still strong.
European shares were firmer towards the end of the week and hit months-high after the no-deal Brexit was rejected.
In the currency markets, major currencies were firmer against the US dollar. The index tracking the performance of the dollar against a basket of currencies dropped for 5 straight sessions.
US Dollar Index (Daily Chart)
Source: GO MT4
Volatility was in the Pound with Brexit votes taking place from Tuesday to Thursday. The Brexit deal was voted down on Tuesday followed by the vote for a no-deal Brexit on Wednesday. Yesterday, the UK lawmakers approved a short and a long delay for Brexit. Sterling pairs moved between gains and losses as traders positioned for the different steps in the Brexit chaos.
GBPUSD (H4 Chart)
Source: GO MT4
Global oil prices had found support from the API and EIA reports at the beginning of the week with a surprise draw in crude oil inventories.
|Monday, 18 March 2019
Indicative Index Dividends
Dividends are in Points