It Will Be Busy Week, Central Bank's Decisions Ahead (BoC, ECB, BoJ), Softer US yields Could Play In Favour Of Gold And More
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Last week ended on a strong positive footage, on hints that some Federal Reserve (Fed) officials have started talking about pausing the interest rate rises to avoid going too far.
BoC, ECB & BoJ to decide
Softer Fed expectations pulled US yields lower and sent equities higher.
On the earnings front, 70% of the S&P500 companies that reported earnings so far did better than earnings expectations, and big US tech companies and oil giants will be reporting earnings this week.
In politics, Boris Johnson announced yesterday evening that he will not be running for the PM role this week. That makes the British ex-Chancellor of Exchequer Rishi Sunak the front runner in the contest. Sterling kicked off the week on a positive note, but bumped into 50-DMA resistance.
In central banks, the Bank of Canada (BoC) is expected to raise interest rates by another 50bp when it meets this week, the European Central Bank (ECB) will certainly raise its rates by 75bp, while the Bank of Japan (BoJ) is expected to stay pat.
The BoJ intervened again in the currency markets on Friday to pull the USDJPY lower, after the pair flirted with the 152 level last week. The pair eased to 145.50 following the intervention and is back to almost 149 at the time of video.
Commodities
In commodities, US crude trades around $85per barrel level, and gold is better bid. Softer US yields could play in favour of gold if we really start seeing material easing in Fed expectations. But the latter is data dependent.
Due this week, investors will closely watch the US latest GDP update, and the PCE index.
Watch the full episode to find out more!
- 0:00 Intro
- 1:02 Are Fed officials softening tone?
- 3:23 China GDP better-than-expected, but well below target
- 4:44 US Big Tech & Oil Giants due to announce earnings
- 7:54 UK to choose its new PM
- 8:57 BoC, ECB & BoJ to decide
- 11:05 Update on crude oil & gold
Ipek Ozkardeskaya
Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
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