The ECB is expected to raise the interest rate to 1.5% and oil is falling
What will move the market on October 25-29?
Last week was full of surprises! Stock indices have shown significant growth. US500 raised by more than 1.5%, NASDAQ gained 2.2% and Chinese Hang Seng surged by 2.5%. Investors were full of confidence about the stocks, as earnings season is gaining momentum. Tesla reported record earnings and reached $900, while other technology companies such as Facebook and Microsoft dropped after worse-than-expected Snapchat report. Bitcoin broke through its previous all-time high of $64 000 and reached $67 000. The US dollar lost 0.3%.
The Bank of Canada and the European Central bank will present their rate statements on Wednesday and Thursday respectively. The Bank of Canada was the first institute that tapered the pandemic stimulus, that’s why investors keep waiting for the hawkish statements. Last time the BOC decided to keep the key rate and monetary policy stimulus at the same level. As the result, CAD/JPY dropped by 1%. EUR has shown some gains against USD and JPY in the last week. Traders expect to hear some hawkish statements from the ECB. If so, the long consolidation above 0,842 on EUR/GBP currency pair might turn into a pump and EUR/USD might return to 1.168.
Next week will be full of releases in the stock market as earnings season continues. Facebook, Google, Microsoft, Visa, eBay, Ford, General Motors, Coca-Cola, McDonald's, Apple, Amazon, MasterCard are among the companies reporting. Wall Street will closely watch this week's reports as 4 of 5 FAANG companies will release their financial statements. FAANG companies have been the main moving power of the US stock market indices during the past year. If their releases will be better than expected, US500 and US100 might break through 4450 and 15700 respectively, and keep moving further.
Oil, gas & metals
During the past week, Brent has been consolidating in the $83 - $85.4 channel. Several banks predicted that oil might reach $100 or even $200 by the end of 2021, but the current situation is way too far from these numbers. As new virus strains spread across the globe, and the numbers of deaths increase Brent will stay under pressure. Traders might use an opportunity to trade inside the channel or wait for a breakout of any side and follow the trend after.
The following information is not investment advice. Remember that trading is risky. Manage your funds carefully and remember that you can use Take Profit and Stop Loss orders to maximize your gains and limit your losses.
Bloomberg says yesterday’s movement was so far the wildest. It was the first time in history for the US500 to crash by 2% and close the day 2.8% above the neutral line. There’re several possible reasons for the move.
Yesterday, the Bureau of Labor Statistics released a higher-than-expected Producer Price Index with 0.2% m/m growth in September, meaning producers are still raising prices for goods and services.
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.
2022 was rough: inflation, energy crisis, and plenty of other controversial situations…