Fundamental Analysis

Weekly Roundup Report 28/04/2017

• July 14, 2017

EVENT RECAP: WEEK ENDING 28^th APRIL 2017

Asia Pacific According to the Australian Bureau of Statistics, consumer prices rose by 0.5% for the first quarter, slightly less than anticipated. The rise in prices represented no change from the previous quarter and indicates that labour market weakness may be impacting consumer demand. The Bank of Japan released the monetary policy statement on Thursday 27^th April and made no changes to the current policy. The bank did, however, raise economic growth forecasts to 1.6% for the fiscal year of 2017-18. Consumer prices were projected to fall short of initial forecasts and were revised to 1.4% for the same period.   Europe Optimism in Europe was stoked by the first round results of the Presidential elections released on Sunday 23^rd April, as the race continues between Macron and Le Pen. Unlike many other political events, the polls correctly identified Macron as the frontrunner. Macron is a Euro supporter, so his lead in the votes resulted in a positive start of the week for the financial markets. Later in the week, Mario Draghi, the President of the European Central Bank, confirmed that the asset repurchasing program will likely continue to December 2017 and beyond. Currently the ECB are buying a range of bonds to the tune of €60 billion per month. There was no change in the EU Minimum Bid Rate.   North America The week started off with statements from Treasury Secretary Mnuchin, who insisted that economic growth for the U.S. would reach 3% at least. The statement comes in response to the International Monetary Fund’s forecast of 2.3% growth for the year and 2.5% for next year. The U.S. government intend to meet their objective of 3% GDP through increased infrastructure spending and tax cuts. Economic growth figures for the first quarter of 2017 significantly missed estimates of 1.3% growth, dropping to 0.7% for the three months ending March 2017. Consumer spending was blamed for the lack of growth as inflation rose during the period. In Canada, GDP figures were also disappointing as the economy stalled at 0% growth for the month of February as output especially in the manufacturing sector decelerated.     United Kingdom Economic growth in the first quarter missed estimates at 0.3% against a previous reading of 0.7% growth for the three months ending December. Growth in the first quarter of 2017 is the slowest since the first quarter of 2016, according to the Office for National Statistics. The fall came in the services sector as consumer spending dropped in response to rising prices.