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- Week ahead overview
Week ahead overview
The very volatile week ended with hopes came after US employment improving data, and over the weekend, Biden told that $1,400 payments could start to go out this month. It seems like a new fuel injection to the economy comes across the global economy. Besides that, the OPEC+ meeting which has been held last Thursday, came up with no increase in production and pushed the prices higher. However, there is still a big question on the tables, what about bonds Yield? USOil printed new highs, while traditional safe havens like Gold and Yen have been printing multi-month low days after another, during last week.
Let's get to see what we have to focus on in the coming week.
GDP, the main Economic indicator
Gross domestic product is the main economic indicator, which shows the healthy level of each economy. In the coming week, Japanese GDP on Tuesday and UK GDP on Thursday will be in focus. For Tuesday, it’s expected to have the Japanese GDP, with no change at 3% expected for Q4 2020. On the other hand, UK GDP is the main question as the UK economy got the worse hit of COVID-19 among the G7 members, recovery expectations from them are also higher. UK GDP will tell us what we have to expect from newly separated EU member. Interest rate.
Interest rate.
Again, interest rate decisions are getting much more important, especially after the latest worries about the bonds Yield. Many market participants are waiting to see the central banks' reaction to that. ECB and BOC will be our banking headlines of the week ahead.
During the pandemic, ECB did not make any changes on interest rates, as it is already was at deficient levels, and there was not more room practically to play with that. However, they tried with PEPP (Pandemic Emergency Asset Purchase program) by the total amount of €750bn in the form of grants with new loan programs in TLTRO’s help the economy to get back on its' feet. That was effective as well, helped the EUR to get above 1.2200 USD. For the coming week, rates are still expected to stay at the current levels, with a wait-and-see policy. But what makes this event important is the decision-maker's comments on Yield and economic outlook, as well as Laggard’s press conference right after that.
And it is not just ECB; BOC policymakers also will get together this week. Same as ECB, the BOC also expected to hold rates steady (at 0.25%), reiterating that the economy will “continue to require extraordinary monetary policy support.” Low for longer is expected to be seen in members' comments, as long as inflation will sustainably achieve its 2% target.
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The United States!
For the US and USD, CPI data on Wednesday and PPI on Friday will be matter, while like every Thursday, Jobless claims will be in the spotlight. Generally, this is a light week for the US calendar, unlike the previous week; however, most traders are waiting to see the fate of the stimulate package. US Federal Budget at the last trading hours of the week also should not be forgotten.
Energy Market
EIA Short-Term Energy Outlook on Tuesday EU season and then on the same day, but in the US season, API data and next day on Wednesday EIA data are the main market drivers for energy market this week. After the huge increase of inventories in last week's data, they are expected to be lower this week.
Stock Markets:
Last week, Devon Energy with 8% gain, and then Oracle +6.6%, GAP Inc. +7.6%, Haliburton +7.9%, and Intel with 4% gain had the best performances, while Tesla with 4% decrease, and DocuSign -3%, Zoom Video -1.6%, Norwegian Cruise Line -12%, Royal Caribbean -5%, Carnival -4.8%, American Airlines -3.7%, and United Airlines by 3% lose, had the worse records.
For the week ahead, "Chevron" will have its annual update on Tuesday; Bumble Inc. will publish quarterly earnings results on Wednesday, while Adobe & JD.com will be reporting on Thursday.
Source: https://tradeproskills.com/
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