Global Market Report - April 27, 2018

Asia

Again the Bank of Japan didn’t disappoint the status quo by keeping interest rates on hold but dropped the date when the country will reach its 2% inflation target. After five years of chasing the target, the BoJ has pushed the goal into the long grass as weak price growth seems to have become the norm.

Asia-Pacific markets, after a number of choppy trading sessions, took part in the optimism sparked by a stronger close on Wall Street and some encouragement from Amazon’s results.

Europe

The standout news this week in the UK is that the economy grew by just 0.1% in the first quarter of 2018. While the Office for National Statistics said that snow disruption was a factor, it was not the main driver of the very weak growth. Construction sector weakness was seen as the culprit this quarter. Bank of England Governor Mark Carney recently caused controversy by warning that a May interest rate rise was not a “done deal” that the money markets had assumed. But today’s news took currency traders by surprise, leading to the pound being sold off against the dollar from 1.39 to 1.38. Carney is speaking in London today at an event so his comments will be more than closely attended to than usual.