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.
Further market volatility might happen if Wednesday’s inflation data is hotter than predicted. During the week, investors will be watching various Fed officials’ talks.
Here is what you should know for this week.
Heightened Volatility
It was the fifth straight week of falls for the Nasdaq and S&P 500 and the sixth for the Dow Jones Industrial Average. Those were the longest losing streaks for the S&P 500 since mid-2011 and the Nasdaq since late 2012.
According to Keith Lerner, chief market strategist, and co-chief investment officer at Truist Advisory Services, the market is fixated on the Fed being behind the curve.
There is a 75 percent likelihood that the Federal Reserve will raise interest rates by 75 basis points at its June meeting, notwithstanding Fed Chair Jerome Powell’s announcement on Wednesday.
In the face of rising bond yields and geopolitical threats like the conflict in Ukraine, market volatility is expected to continue.
Energy Prices
The European Union is close to reaching an agreement on new sanctions against Russia for invading Ukraine, including a phased embargo on Russian oil, which accounts for more than a quarter of EU imports.
The move will force European refineries to compete for new crude suppliers, leaving drivers with higher gas prices at a time when the cost of living crisis is pinching consumers worldwide.
Because of the impending ban, U.S. crude prices rose about 5% last week, while Brent rose nearly 4%, as the prospect of tighter supply offset concerns about the global economy’s outlook.
Phil Flynn, Price Futures Group analyst said to Reuters that in the short term, the fundamentals for oil are bullish, and it is only fears of a future economic slowdown.
US Inflation Data
The April CPI data, due out on Wednesday, will reveal whether the fastest rise in inflation in over 40 years has peaked. In March, the annual rate of inflation was 8.5%, as gasoline prices reached new highs.
Economists predict an annual rate of 8.1 percent, but a stronger-than-expected reading could strengthen the case for the Fed to tighten monetary policy even further.
Investors are concerned that the Fed’s aggressive tightening could tip the economy into a recession.
There will also be a flurry of speeches by Fed policymakers in the coming week, including Atlanta Fed President Raphael Bostic, New York Fed President John Williams, Fed Governor Christopher Waller, Minneapolis Fed President Neel Kashkari, Cleveland Fed President Loretta Mester, and San Francisco Fed President Mary Daly.
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-id.com/en/resources/economic-calendar/
The Week Ahead
All times listed are EDT.
Monday, May 9
12:00: China – Balance of Trade APR
21:30: Australia – NAB Business Confidence APR
All Day: Hong Kong, Russia, Ukraine & Kazakhstan – National Day
Tuesday, May 10
05:00: Germany – ZEW Economic Sentiment Index MAY
07:00: Brazil – BCB Copom Meeting Minutes
12:00: US – EIA Short-Term Energy Outlook
20:30: Australia – Westpac Consumer Confidence Index MAY
20:30: Australia – Westpac Consumer Confidence Change MAY
21:30: China – Inflation Rate YoY APR
Wednesday, May 11
04:00: Eurozone – ECB President Lagarde Speaks
08:30: US – Core CPI MoM APR
10:30: US – Crude Oil Inventories
Thursday, May 12
02:00: Great Britain – GDP Growth Rate YoY Prel Q1
02:00: Great Britain – GDP Growth Rate QoQ Prel Q1
02:00: Great Britain – GDP MoM MAR
02:00: Great Britain – Manufacturing Production MoM MAR
08:30: US – PPI MoM APR
08:30: US – Initial Jobless Claims
Friday, May 13
10:00: US – Michigan Consumer Sentiment Prel MAY
All Day: Denmark – Market Holiday
