Volatility in risk assets remained following another week of notable political events. Gold prices stayed elevated, but failed to overtake the $1300 level, closing out the week slightly lower after multiple rally attempts. Erdogan’s narrow victory in the Turkish referendum vote has already drawn concerns from Europe, but is likely to create even further friction over the coming months. In the United Kingdom, Prime Minister May set new elections for June to strengthen the Conservative Party’s mandate to negotiate a comprehensive Brexit agreement.
Apart from the political developments, WTI fell back below $50 per barrel as US production and the rig count continued to climb despite crude stockpiles falling, marking two straight weeks of drawdowns. US housing data came in stronger than anticipated, with existing home sales managing to rebound by 4.40% to a 5.71 million annualized pace in March after contracting by -3.90% a month earlier. Moving to Asia, Chinese GDP managed to beat consensus for the yearly figure which came in at 6.90% even though first quarter growth slipped to 1.30%. For Japan, the trade surplus narrowed as anticipated, but nevertheless managed to beat expectations, coming in at JPY 615 billion compared to forecasts of JPY 576 billion.