If you look at the Asian markets that opened this week there has not been much excitement, but the markets have picked up strength. The Hong Kong and Japan indices have gained and are up by 1.25%. The commodity that has gained the most has been gold, thanks to the refit situation adding to the uncertainty of European markets and how they will face the downturn that is going on. Crude oil is down and is likely to remain at levels around 49. Commodity movements seem to be limited to such extent. Take a glance at how the first quarter FY16 ended last week.
The last weekend there were more talks about the Brexit situation, but the markets did not get swayed by any apprehension about that. Trading has been subdued as well due to the US national holiday that has been on 4th July. As per the Brexit situation and the impact of the same on the finances of the European Union, the ECB executive board stated that it is too early to predict any action that would be taken by the central bank. The time frame as well as terms of the Brexit needs to be cleared up so that uncertainties do not remain. British economy as well as monetary policies would have faced challenges that are contradictory in nature. The challenge of inflation is one and the effect of the same on the pound that has fallen by 11 percent since Brexit was announced.
The impact of Brexit of the European economic scene is uncertain and that is leaving a negative effect on job market predictions as well as on investments. The central bank would be looking at Q2 for signs to predict which way the inflation rate would move. With such uncertainties in the European market and the lack of a clear winner in the polls in Australia turns the focus of the world economy towards the US. The events in this country will remain in focus now. Rates have remained steady, even after the Brexit situation unfolded. Rate hikes are being predicted by the Feds as they see signs of investments coming their way past the Brexit uncertainty. Job data that has come in to US for the first quarter look solid and that would surely encourage investors to consider putting in their funds in this market.
If you look at the micro events that have happened in the last week ending the first quarter you will find that Australia has seen building approvals that has boosted confidence in the investor sector. Trade balances and retail sales have been positive in this country. UK retail sales have held as well as the USA factories see a steady inflow of orders. Japan has showcased cash earnings for the labor sector, while Germany and UK have had positive trade balances. These are some indications of the forex market holding steady. That heralds the start of a new quarter as well. Find Out More here about Why Japan Threatens To Make Forex Intervention.