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Payrolls Data Highlights Policy Divergence
ETFS Multi-Asset Weekly Payrolls Data Highlights Policy Divergence
- Freezing weather conditions support natural gas prices.
- Confirmation of QE sends gold miners lower.
- Divergent monetary paths pressures Euro.
This week will be dominated by the launch of the heavily anticipated quantitative easing program by the ECB. A strong US non-farm payroll reading on Friday underlined the stark contrast in circumstances for the Federal Reserve and the European Central Bank. As demonstrated on Friday, European and American economies are likely to continue to diverge in line with prospects for monetary policy. However, after the official Chinese growth target was lowered this week attention may shift to Chinese lending data due next week.
Commodities
Freezing weather conditions support natural gas prices. Snowfall and frigid temperatures in the eastern half of the US boosted heating demand for natural gas. A larger-than-expected withdrawal from natural gas inventories last week sent prices higher, with Henry hub gas ending the week up 5.3%. Reports that US crude stocks rose to a record 444.4mn barrels last week failed to prevent WTI prices climbing higher. The US crude benchmark was supported by a release of the Federal Reserve’s beige book which detailed the likely cut in capital expenditures by US oil producers in 2015 as the plunge in oil prices impacts the industry. Carbon prices fell 4.4%, as coal-reliant members of the European parliament posed a potential roadblock to negotiations towards the relief of the current oversupply of allowances in the emissions market.
Equities
Confirmation of QE sends gold miners lower. After reaffirming the launch of quantitative easing, Mario Draghi delivered a relatively upbeat assessment of the Eurozone’s economic prospects. The positive tone sent European bourses rising with the DAX 30 and FTSE MIB climbing 1.6% and 1.1%, respectively. The prospect of stimulus in Europe boosted sentiment and dented safe haven demand for gold resulting in its decline through the psychological US$1,200/oz level. The fall in gold prices caused DAXglobal® Gold Miners Index to fall 4.8%. The strong performance of European stocks pushed volatility lower and the EURO STOXX 50® Investable Volatility Index to its lowest level this year at 15.3. The MSCI China A Index fell 0.9% as the Chinese premier Li Keqiang reduced the official growth target to 7.0% from 7.5% as the country tackles structural and economic reform.
Currencies
Divergent monetary paths pressures Euro. Last week the prospect of the ECB’s QE programme launch caused the Euro to fall to an eleven and a half year low against the US dollar. These losses were extended on Friday as a strong US non-farm payroll reading increased the likelihood of US rate normalisation starting at the Fed meeting in June. Recent indications that the US economy continues to strengthen brings the timeline for higher interest rates forward. While in Europe the ECB plans to loosen monetary policy and various central banks have put negative interest rates in place to combat deflation. The differing outlooks have sent the Dollar and Euro in opposite directions against other major global currencies, a trend which only looks set to continue.
Important Information
This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (”FCA”).
The global gaming industry has evolved into one of the world’s most dynamic entertainment sectors, expected to generate $188.9 billion in 2024 and surpass $200 billion by 2027, outpacing film and music combined.
From arcades to smartphones, the gaming industry has continuously evolved with each technological shift. Today, mobile gaming is a major player the market, currently accounting for the largest share of global revenues. As digital platforms, cloud gaming, and eSports continue to grow, gaming is establishing itself as a core part of the global entertainment economy.
Mobile gaming is leading this transformation, currently accounting for the majority of industry revenues and 40% of all global app downloads. With 5G adoption and 90% smartphone penetration expected by 2030, billions of new players will join the market, making gaming more accessible than ever.
However, the rollout of 5G also carries risks, uneven global infrastructure buildout, high capital costs for carriers, and potential fragmentation across networks could delay or limit the full realization of these benefits.
Source: Vantage Market Research, 2023; Pelham Smithers, 2020
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