To start your trading week, let us have a peek at what the global market sentiment will be like this week through our Week In Review.
Last week’s market sentiment deteriorated amid Easter-shortened holiday trading. The Nasdaq-100 Index (NDX) and the Dow Jones Industrial Average (DJIA) were hammered, pushing them deep into the red for the second week in a row.
In line with Wall Street’s risk-off mood, Bitcoin prices fell for a second week, with BTC/USD falling below the high-profile 40,000 mark.
At first glance, a steepening of the curve is a good indicator for the economy. However, the change at the long end of the curve indicates a bear steepening, which worries markets.
Here is what you should know for this week.
Oil Bulls Keep Going
Oil had a significant week this week, as prices broke above the bearish trendline that has been in place since the top. After hitting key support at monthly lows on Monday, bulls pushed all week, returning above the 100 level and eventually over 105.00.
On Thursday, oil settled higher ahead of the long Easter weekend, with news that the EU may phase in a ban on Russian oil imports supporting prices. The phased-in approach will be used to give Germany and other countries time to find new suppliers.
The proposed EU ban will be debated until after the final round of the French presidential election on April 24 to avoid jeopardizing President Emmanuel Macron’s re-election chances.
Since Russia invaded Ukraine, the EU has imposed five rounds of increasingly punitive sanctions, but it is under pressure from its allies to do more. The EU, on the other hand, is unprepared to deal with the economic consequences of blocking oil imports from its greatest supplier.
U.S. Economic Data
The economic calendar in the United States is rather light this week, with many updates on the housing market. On Tuesday, data on housing starts, and permits will be released, followed by an update on existing house sales on Wednesday.
The housing data will be keenly monitored, as mortgage rates in the United States continue to rise in reaction to rising market interest rates.
Thursday will see the release of the weekly report on initial unemployment claims, as well as the Philadelphia Fed manufacturing index. On Friday, data on industrial and service sector activity will be released.
Earnings season is in full swing, and several Dow blue chips are set to report in the next few days. These include healthcare giant Johnson & Johnson (NYSE:JNJ), Procter & Gamble (NYSE:PG), IBM (NYSE:IBM), and American Express (NYSE:AXP).
Investors will also be looking for earnings from streaming giant Netflix (NASDAQ:NFLX) after the close on Tuesday and electric-car maker Tesla (NASDAQ:TSLA) after the close on Wednesday.
Bank earnings will continue on Monday, with Bank of America (NYSE:BAC) and Bank of New York Mellon (NYSE:BK) both reporting before the market opens.
Signs that U.S. corporate earnings will be stronger than expected this year could bolster the case for other market sectors, such as banks, travel companies, and other businesses that benefit from a growing economy, as well as high-growth and technology names that have fueled stock market gains for the better part of the last decade.
Keep an eye on the market prices and while you wait for your trade breakout, take advantage of the Juno Markets Economic Calendar to keep yourself updated with the market’s most important economic news events. https://www.junomarkets.com/en/resources/economic-calendar/
The Week Ahead
All times listed are EDT.
Easter Holiday in UK, Germany, France, Switzerland, Hong Kong, New Zealand among others.
21:30: Australia – RBA Meeting Minutes
8:30: US – Building Permits: seen to slip to 1.830M from 1.865M previously.
21:15: China – PBoC Loan Prime Rate: was previously set at 3.70%.
8:30: Canada – Core CPI: printed at 0.8% in February.
10:00: US – Existing Home Sales: forecast to retreat to 5.80M from 6.02M.
10:30: US – Crude Oil Inventories: predicted to crash to 0.863M from 9.382M.
21:30: Australia – Retail Sales: anticipated to drop to 1.0% from 1.8% MoM previously.
5:00: Eurozone – CPI: likely to remain steady at 7.5%.
8:30: US – Initial Jobless Claims: expected to fall to 175K from 185K.
8:30: US – Philadelphia Fed Manufacturing Index: probably dropped to 20.0 from 27.4.
13:00: US – Fed Chair Powell Speaks.
13:00: Eurozone – ECB President Lagarde Speaks.
2:00: UK – Retail Sales: anticipated to remain at -0.3% MoM.
3:30: Germany – Manufacturing PMI: expected to dip to 54.4 from 56.9.
4:30: UK – Manufacturing PMI: previous print came in at 55.2.
9:45: US – Markit Composite PMI: previous release printed at 57.7