News & Analysis

Weekly Summary – Eyes on Nonfarm Payrolls

July 5, 2019

By Deepta Bolaky

Weekly Summary 

Trade Truce

The week started with a bang of optimism after the trade truce was announced at the G20 summit. The US President took a softer approach and allowed American firms to sell technology to Huawei. On China side, they agreed to buy a “tremendous” amount of US farm products.

Overall, both parties agreed to a new ceasefire and a promise to restart negotiations. During the week, the US administration advises there have been phone calls between the two leaders.

The stock markets opened higher on Monday. However, the revival of risk sentiment was short-lived which weighed on global equities. Despite the choppiness in the markets, all three major US equity benchmarks were at record highs ahead of the US Independence Day Break.

Big Week for Europe

Investors turned risked off as the reality of trade tariffs overshadowed the brief moment of global trade calm. President Donald Trump threatened another $4bn tariffs on European goods.

The highlights of the week were the European Union top jobs. The EU leaders selected the next leaders of the bloc. The nomination of Christine Lagarde stood out as it came as a surprise. Her experience as the leader of the IMF and as a former French finance minister might have reassured governments of EU countries that her nomination will keep the euro-zone monetary policy steady. She is widely expected to follow the footsteps of Mario Draghi.

European shares climbed higher on the prospects of low-interest rates.

Source: Bloomberg Terminal

On the other side, the Euro was seen trading on the downside following the tariffs threats and Christine Lagarde nomination. The EURUSD pair is currently trading at 1.1280. On the technical side, despite the downward pressure, the pair is still trading in an uptrend.

Australia – Interest Rate and Tax Cut

The record low-interest rate and the income tax cut plan were the two primary drivers of price action in the markets. It was a solid week for local shares. The ASX200 hits a new 11.5 year high at 6,744 and is on its way to close the week in positive territory.

After heavy losses at the start of the week, the Aussie dollar is relatively flat at 70.20 US cents.

On the economic front, we saw some improvement in the housing data and trade balance hits a record high at $5.7bn.

The tax cut is expected to double the RBA’s rate cut effect as it is viewed as the equivalent of another two interest rate cuts. The rebates are expected to boost consumer spending and GDP growth.


Oil has its worst reaction to the OPEC meeting. A trade truce, the nine-month extension for production cut and large crude oil inventories draw did little to cushion the freefall.

After a dramatic fall in the oil market, we saw a partial rebound in oil prices on the reduction in the number of oil rigs reported on Wednesday.

WTI and Brent Crude Oil are trading in the vicinity of $56 and $63.

Gold is on track to reach its longest stretch of weekly gains since 2011. As of writing, XAUUSD is currently trading at $1,416.

Investors eagerly await the Non-farm payrolls data for more clues on the Fed’s interest rate path. 

Monday, 08 July 2019
Indicative Index Dividends
Dividends are in Points
ASX200 WS30 US500 US2000 NDX100 CAC40 STOXX50
0 0 0.046 0.023 0 1.05 0
ESP35 ITA40 FTSE100 DAX30 HK50 JP225 INDIA50
0.228 0 0 0 0 0 1.33

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