Forex Market Overview
It was a relatively quiet start to the trading week with little in the way of fresh market drivers to inspire strong moves in either direction.
Stock Indices Under Pressure, Worse than Expected EPS Weights
Global stocks started to drift lower in trading as a worse than expected results in US earnings weighed on market sentiment.
The US equities faded later in the day as Goldman Sachs earnings report disappointed with the major indices all closing just under flat.
FX Market Remains Quite, Fundamentals Lacks
The foreign exchange market was tranquil once again with the majors all trading in extremely close ranges with the one exception of the Cad which dropped as the BOC business outlook turned negative.
Commodities Weaken on Risk On Sentiment
Commodities, such as Gold and Crude oil also dropped again with Oil lower as US rig activity increased, WTI at $63.50 and Brent just above $71, Gold remains below 1290.
US earnings season continues to bring updates thick and fast in the next few days, and with little else changing from a macro perspective, they will continue to influence the market direction in the short term.
The main focus in the Asian session was the latest release of the RBA’s Monetary Policy Meeting Minutes this morning. The Statement saw a change to the policy outlook language for the first time in years, opening the door to considering a rate cut. The market will be trying to glean the rationale for this.
Looking ahead to today’s trading, the London open could see an increase in activity, first up is the latest employment data in the UK and this is followed swiftly by the German ZEW Economic Sentiment number. The US session is light on economic data releases but the focus will be on the latest earnings reports.
The UK labor market is performing pretty well, despite Brexit.
The unemployment rate held at 3.9% in January and none of the changes are anticipated here. Wages are forecasted to rise from 3.4% to 3.5% in the forthcoming release for February.
The Claimant Count Change, which frustrated the market with an accretion of 27K, is anticipated to surge again, this time by 17.3K.
Investors will be carefully monitoring the big players as well as looking at the season as a whole. Any further signs that corporate America is suffering in light of the plethora of headwinds that the market is facing could lead to some significant downside corrections over the next couple of weeks especially with thinner liquidity conditions around the Easter holidays.
List of Companies Releasing EPS Today
- Bank of America (BAC)
- BlackRock (BLK)
- Comerica (CMA)
- IBM (IBM)
- J&J (JNJ)
- Netflix (NFLX)
- Omnicom (OMC)
- Prologis (PLD)
- UnitedHealth (UNH)
Conversely, if we see good signs of resilience from the market, this may be enough to induce further gains for global stock markets across the board. Have a good day today.