Markets looking for direction

There was little in the way of market-moving data or news this week. China’s PMI data for April were broadly unchanged on the month, painting a picture of relative stability. Meanwhile, although the US nonfarm payrolls figure on Friday was somewhat below expectations, this was offset by the fact that unemployment fell to an 18-year low of 3.9%. Looking ahead, trade could be the markets’ focus early in the week given the negotiations between China and the US and another round of NAFTA talks. Keeping with the same theme, China is set to publish its April trade numbers on Tuesday. We expect the country to report a sizeable surplus after the seasonal deficit in March, but we expect growth in commodity imports to slow a little. Towards the end of the week, the focus in the oil market will be the Saturday deadline for President Trump to waive the sanctions on Iran. If the sanctions are not waived, oil prices could jump.