Weekly Market Outlook: Eyes on US Earnings, Central Banks and Economic Data

peter.nguyen

Trader
Apr 6, 2022
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USD awaits Earning Reports and Key Data Releases

Markets turn their focus to US earnings reports as market giants including Microsoft, Twitter, Facebook, Alphabet, Amazon, and Apple are scheduled to releases their quarterly earnings reports.

On the data front, advance estimates for Q3 GDP figures will offer more clues on whether the US economy is heading towards an inevitable recession as the Federal Reserve is set to raise rates by another 75 bps in the coming weeks to stop the runaway inflation.

Investors will be watching PCE inflation, Fed’s preferred inflation gauge, that will play a major role in rate expectations for the upcoming meetings. Flash PMI readings for October will also show the domestic economy handles the high interest rates.

EUR – ECB to hike again as inflation reaches new highs

The key event for the EUR this week will be the ECB meeting on Thursday, the bank is widely expected to hike rates again by 75 basis points. A move that will bring borrowing costs to its highest since 2009, following data that showed inflation hit a new record of 9.9% in September.

The main question is how much further the bank is willing to go? Markets are pricing in another 75 bps hikes for another couple of meetings before slowing down to 25 bps hikes afterwards.

EUR investors will closely follow ECB President Lagarde’s comments during the press conference on the bank’s tightening plans, the ECB’s balance sheet and possible changes in TLTRO loans.

Weekly Market Outlook

On Monday, Eurozone’s PMIs will kick off the week and flash estimates are expected to show that the German economy contracted in the third quarter suffering from high energy costs. Meanwhile, preliminary CPI figures are likely to point to a further acceleration in inflation in several countries.


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Source: Weekly Market Outlook: Eyes on US Earnings, Central Banks and Economic Data