Week in Review: Another rollercoaster week for markets

parties and resulting in a referendum on the EU sent the Euro tumbling to a 10-month low. It was interesting how investors’ fears over Italy’s political turmoil started to ease mid-week on signs that a snap election may be avoided. The Euro was thrown a lifeline this week, after a last-minute coalition agreement between Italy’s two anti-establishment parties eased tensions.

Away from the Euro, global sentiment was dealt a blow after the United States imposed steel and aluminium tariffs on Mexico, Canada and the EU. With Canada and Mexico immediately retaliating against the US tariffs and the EU threatening a similar response, fears could intensify over a global trade war.

In the commodities arena, Gold continues to hunt for a fresh directional catalyst, while Oil remains somewhat pressured by expectations of OPEC boosting output.

The major risk event remains the pending US jobs report which could shape rate hike expectations beyond June. A solid NFP print, coupled with signs of accelerating wage growth, may heighten speculation of higher US interest rates this year.

With the number of high tier economic releases limited in the upcoming trading week, global stocks and currency markets are likely to be driven by trade developments and political developments in Europe.