Markets were resilient last week despite a chemical weapons attack on Syrian civilians over the weekend prior. The co-ordinated efforts of the US, the UK and France, who jointly targeted Syria, in response to an alleged chemical weapons attack on Syrian civilians had little impact on global equity markets with the majority closing in positive territory.
There was a myriad of data releases last week. Key releases were US retails sales, China GDP data and UK inflation.
US retail sales rebounded in March following three consecutive monthly declines, buoyed by big ticket purchases such as motor vehicles. Whilst US consumers, who account for two-thirds of economic activity, continue to support the economy, business confidence has started to show some fragility in the light of recent market volatility.
China’s GDP data for the first quarter of the year surprised to the upside, growing at 6.8% year-on-year, 0.3% ahead of the Government’s target of 6.5%. Whilst this is positive news, the future growth of GDP will be dependent on China’s ability to continue to trade globally; should trade tensions between China and the US escalate, both economies will face harsher business environments.
UK inflation data was the focus of last week dropping to a one-year low of 2.5%. The surprise fall will take the pressure off the Bank of England to raise interest rates in May. UK inflation has been as high as 3.1% in January of this year, with the International Monetary Fund warning governments to get a handle on their finances as global debt levels have now surpassed those of the financial crisis.
Looking forward to the week ahead, there will be several key economy data releases with the highlight being the ECB meeting on Thursday.
