Stock markets rose during the past week after China’s Ministry of Commerce announced last Thursday on its website that the United States and China will resume talks early next month in Washington. The commercial representatives of the two countries will hold preliminary talks in mid-September to prepare high-level negotiations in October.
The announcement came after a call between China’s vice prime minister, Liu He, the US trade representative, Robert Lighthizer, and US Treasury Secretary Steven Mnuchin. As reported by the Ministry of Commerce, the governor of China’s central bank, Yi Gang, also participated in the telephone conversation.
Traders also welcomed with optimism the double defeat of Boris Johnson last week in the British Parliament, as this considerably reduced the chances that the United Kingdom’s departure from the European Union will finally take place on October 31 in a messy way.
Friday’s data reflected that the US economy created 130,000 jobs in August, far from the planned 160K. The unemployment rate remained at 3.7%, while in the last 12 months wages increased by 3.2%, one tenth less than in July.
Fed Chairman Jerome Powell said last Friday in reference to the latest employment data that the economy continues to grow moderately and the labor market is strong, although there are still significant risks that the central bank is closely monitoring.
This week will be marked by the monetary policy meeting of the European Central Bank to be held next Thursday. Stock markets could receive new momentum if new stimulus measures were confirmed in Europe.
Asian markets have started the week with new macro data that underscore the need for greater stimuli in China, exports from the world’s second largest economy fell unexpectedly in August, as shipments of products to the US collapsed 16 percent .
The Shanghai Composite Index closed the session on Monday with an advance of 0.84% above 3,000 points, driven by the Chinese central bank measure announced last Friday to reduce the amount of cash reserves that banks. Japan’s Nikkei 225 rose 0.56% to 21,318 integers.
Wall Street closed last Friday with a mixed sign in a week marked by the scheduled meeting between the United States and China in early October and the defeats of Boris Johnson in the British Parliament.
In the weekly calculation, the Dow Jones rose 1.49% to 26,797 points, the S&P 500 rose 1.79% to 2,978 and the Nasdaq gained 1.76% to 8,103 units. The increases were attributed to the optimism generated by the confirmation that Chinese and US negotiators will meet in October.
In Europe, the weekly closing was quite positive with increases of 2.01% in the Ibex 35, 2.11% in the DAX 30 in Frankfurt, 2.25% in CAC 40 in Paris, 2.93% in the FTSE MIB of Milan and 2% in the Euro Stoxx 50. This Monday, the indexes of the European region show increases of 0.20% on average in the first trading bars.
Dollar is down in the Forex market
In the currency markets, the dollar index fell by 0.50% last week, but remains clearly above the support at 98 points. However, against the yen it rose 0.60% in the week, up to 106.90. In the daily chart of the USD/JPY, we observe that an inverted Head and Shoulders formation, a trend change pattern, could be forming.
The euro closed the week with a slight rise of 0.34% at $1.1028, relatively close to the 28-month low set last Tuesday at 1.0926. The pound also rose 1.07% to $ 1,2289, the British currency recovered from a minimum of three years after the possibilities of a Brexit without agreement were dissipated. British lawmakers will vote on Monday if early elections will be held.
In commodity markets, gold recorded a weekly fall of 0.87% to $1,507 per ounce, and the price of Texas WTI oil posted a weekly rise of 2.96% to $56.73 per barrel , after Saudi Arabia announced that production cuts will continue.
On the macroeconomic front, this morning we have learned that Japan’s Gross Domestic Product fell from 1.8% to 1.3%, as expected. Later we will know the GDP figures and the industrial and manufacturing production of the United Kingdom, while in the United States the consumer credit figures will be published.