This was a tough week for the markets,
with global stocks declining for the five consecutive days. The reason for the
decline was that traders were looking for the next big thing that will happen
in the market. This is after it emerged that China and the United States were
in the final stages of hammering a trade deal. Here were the biggest stories
this week.
OECD Report
This week, the Organization for
Economic Cooperation and Development (OECD) released its economic forecast for
the year. In the report, the organization became the next one in lowering the
economic forecast. It now expects the economy to grow by 3.3%, down from the
previous guidance of 3.5%. It blamed this on the uncertainties surrounding
Brexit and the ongoing trade conflict between United States and China. This was
the second time in less than five months that the organization has lowered the
guidance.
European Central Bank
Yesterday, the European Central
Bank (ECB) released its interest rates decision. As expected, the central bank
left interest rates unchanged and extended the period in which it expects to
raise rates. It now expects to hike in the end of the year. This was a stretch
from the previously expected rate hike of summer. The bank also moved to
provide stimulus with the goal of rejuvenating the suffering European economy.
Reserve Bank of Australia
The Reserve Bank of Australia
released its interest rates decision this week. As expected, the bank left
interest rates unchanged and hinted that rates could remain this low for an
extended period of time. This was followed by the release of the GDP numbers,
which remains significantly lower than what traders were expecting. The reason
for this is that Australia’s economy depends on China, which is experiencing a
sluggish growth. Also, the Australian economy has seen a slowdown in the
housing sector.
China data
Today, China released the trade data
that missed the consensus estimates. In February, the country’s exports
declined by more than 20%, which was worse than the expected 4.8%. Imports on
the other hand reduced by 5.2%, which was worse than the expected 1.4% and the
trade surplus reduced to just $4.2 billion. This was from a high of $39 billion
in the previous month. This is the biggest disappointment in the Chinese economy.
It came two days after data from the US showed that the deficit increased to
the highest level in 10 years.
US Jobs Numbers
The US jobs numbers released by
ADP showed that the economy created less jobs in February than expected. At the
same time, the layoffs numbers released by Challenger showed that the economy
saw more layoffs than had been expected. Today, traders will pay close
attention to the official jobs numbers released by the Labor Department.
Carlos Ghson
In Japan, the former Nissan CEO
Carlos Ghson was released from the Tokyo Detention Center after paying a $9 million
bail. He had been detained for more than three months after being accused of
financial crimes. This led to a slight gain in the Japanese yen because
international investors have been afraid of investing in the country.
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