market insight

Market round-up: 25 – 1 March 2019

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The information in this blog or any response to comments should not be regarded as financial advice. If you are unsure of any of the terminology used you should seek financial advice. Remember that the value of investments can go down as well as up, and could be worth less than what was paid in. The information is based on our understanding in March 2019.

US/China trade talks

Dydd Gŵyl Dewi as they say in Wales, marks the feast day of St David, the nation’s patron saint. Celebrated throughout the land with daffodils and leeks, the 1st March has been an important date in the Welsh calendar since the 12th century.

The relevance of 1st March, or indeed the lack of, was also a cause for cheer for economists this week as the much touted date for concluding trade talks between the US and China was pushed back. US President, Donald Trump, confirmed on Monday he would delay a planned hike in trade tariffs set for Friday, as the two countries had made “significant progress” towards an agreement. Investors awoke to a surge in Chinese shares, with Shanghai listed equities jumping 3.5% to territory not seen since last summer. With a level of flexibility not witnessed before in regards to negotiations between the two sides, the Chinese benchmark has risen over 20% (in local currency terms) during 2019 alone.



The other major winner of the week was sterling, receiving a double boost from weak US economic data and news that Theresa May had offered MPs the chance to vote on delaying Britain’s exit from the EU. The pound rocketed on Wednesday to $1.33, a five month high. The US dollar was pulled down by lacklustre housing numbers, painting a dour picture for US construction. American house-building tumbled to a two year low in December as construction of both single and multi-family homes declined.


US economy beats forecasts

There was some good news for the world’s largest economy however, as both consumer confidence and advance GDP figures came in above analysts forecasts. After a prolonged US government shutdown, many feared that the US economy would have had irreversible damage inflicted upon it. Coming in 2.6% against forecasts of 2.2%, the inflation adjusted value of goods and services in the US again confounded a slowing global economy.



As the first full week of March gets underway, the red circle presumably drawn round the 29th March on every calendar in Westminster gets perilously closer.


Economic health check

It is in Europe we start this week however, as Sentix, the investment survey firm, release the results of their investor confidence research. The results act as a leading indicator of economic health. By the very nature of their job, investors and analysts for wealth management firms and private banks are highly informed, with changes in their sentiment being a very early signal of future economic activity.


Construction sector

With the US construction industry having posted some very poor numbers last week, all eyes will be on Construction Spending data also released on Monday. Measuring the change in the total amount builders have spent on construction projects over the month, the data should allow us to gauge the health of what is a very important sector stateside. The industry has a knock on impact towards many different parts of the economy, from estate agents to solicitors and furniture retailers and therefore economists study the data closely.


A tale of two central bankers

The latter part of the week should be a tale of two central bankers as head of the European Central Bank, Mario Draghi and our very own Mark Carney are scheduled to give press conferences. Carney will address the House of Lords on his views on inflation and the domestic economy in general, potentially generating increased currency volatility.


Across the channel

All bets are off as to whether the ECB will usher in the first round of quantitative tightening. Having threatened for months to start gently raising rates, recent softer economic data in the Eurozone and Italy slipping into recession may have tempered the bank’s enthusiasm for a hike.


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