Spreadex Market Update
IMF Upgrades Global Growth Outlook – Busy US Earnings Day Ahead
Equities Hampered by Rising Dollar
Equities saw mixed action yesterday amidst a pickup in USD which curtailed upside in US stocks. A stronger USD suggests some uncertainty ahead of tomorrow’s FOMC. In Europe markets appeared to shrug off worse GDP data from Germany and worse inflation data from Spain with the DAX rebounding off session lows to end the day in the green. The FTSE saw muted action as traders await the BOE on Thursday while the Nikkei was seen correcting lower from initial highs on the week.
Big US Names Due to Report
With the busiest week of the US earnings season underway, today sees the first big names reporting with Exxon, Pfizer, Samsung, McDonald’s, UBS and Spotify due to report. These incoming earnings will be closely watched ahead of the Fed and traders will be paying close attention to any forecasts or guidance around potential recession risks.
Stronger USD Turns Risk FX Lower
The uptick in USD has turned the tide a little across FX markets. JPY has seen a wave of fresh demand given the more subdued tone to risk sentiment on Tuesday. Some hesitance in markets ahead of the week’s three big central bank meetings which commence tomorrow is driving support for JPY. On the data front Eurozone GDP will be closely watched ahead of Thursday’s ECB meeting. We also have CAD GDP due though this will likely lose a little impact on the back of the recent BOC meeting. AUD remains under pressure today as risk assets struggle to perform.
Metals & Oil under Pressure
In the metals and commodities space, gold and silver both remain under pressure today with gold now starting to accelerate in its decline from recent highs against the backdrop of a stronger US Dollar. Today’s US consumer confidence data has the potential to drive metals lower still if USD is higher on the back of the release. Crude oil is back under pressure today also. Futures prices are now down more than 6% from last week’s highs as a stronger US Dollar and weaker risk sentiment continue to drag crude lower.
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