This week, US stocks have been
relatively flat as investors waited for the beginning of the earnings season.
As shown below, the Dow was a laggard, mostly because of the problems Boeing is
facing. This article will look at the week’s biggest stories.
Arab Spring 2.0
In the past few weeks, the Middle
East has not been at ease. It started with Algeria, where demonstrations ended
the career of the ailing Abdelaziz Bouteflika. He had started his presidency in
1999 and had planned to extend his rule. This is despite the fact that he has
not been in the country since 2013. This was followed by demonstrations in
Sudan. Yesterday, the military ended the career of Omar Bashir, who has been in
power since 1989. In Libya, forces loyal to Khalifa Haftar are approaching
Tripoli, where fighting is expected. Due to the size, there is a likelihood
that the fighting will be large, leading to the death of many people. The
implication of this is that the crisis in the region could continue, leading to
the disruption of the crude oil industry. If this happens, it will lead to a
rise in the price of oil. The chart below shows the trend in the oil market
this week.
FOMC
The Federal Open Market Committee
(FOMC) released the minutes of the March meeting on Wednesday. The minutes
showed that the members were concerned about the slowing economy. They were
concerned about the soft economic numbers like the industrial production,
retail sales, and consumer confidence. Therefore, they decided not to raise
interest rates this year. They also left the doors open to a rate cut. The
chart below shows the performance of the dollar index this week.
Brexit
Brexit was still in the news this
week. In a meeting with European leaders, Theresa May requested for another
extension. This prevented the country from having a no-deal Brexit today. The
EU leaders, agreed to give the prime minister a six-month extension. While the
delay provided relief to the EU supporters, it introduced fresh concerns that
the extension could extend the uncertainty about the future of the UK.
Investors are asking themselves about what will happen in the next six months
that could not have happened in the past few months. The chart below shows the
performance of sterling against the USD and the euro.
US-EU Trade
As the US-China talks nears an
end, the focus has been shifted towards Trans-Atlantic trade relations. This
week, the US said that it will add tariffs to EU goods worth $11 billion. This emerged
from a case that the US won in the World Trade Organization. Trump also sent a
few tweets condemning the EU, which is a so-called ally of the US. Yesterday,
EU leaders instructed the European Commission to start negotiations with the
US. However, these negotiations will focus on the industrial goods. The US has
insisted that agriculture has got to be in the negotiations, a move that has
been rejected by EU countries that do a lot of agriculture like France. The
chart below shows the performance of the EUR/USD pair this week.
The post Week Review: A Look at the Biggest Stories This Week appeared first on Forex.Info.