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Dollar Dips in Early Trading, Wall Street Eyes Earnings

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US Equities

Markets closed on Friday and an airstrike on Syria by United States, United Kingdom, and France took place. The closure of the market avoided volatility in Global indices. When Trump, first tweeted about the strike, major indices took a hit, as fears by investors mounted.  But since the airstrike was launched when markets were closed and it wasn’t as fierce as expected, stocks are still holding the gains of late last week. As the nightmare of a drop was surpassed, investors are awaiting the release of the earnings of the first-quarter of 2018 where they expect these earnings to show growth. Moreover, stock markets will be waiting for the GDP figures from China along with Industrial production and retails sales.

USD

The dollar index, ended Friday with a Doji, which is a candlestick that signals that buyers and sellers are balanced. Last week, FOMC meeting minutes confirmed the hawkish tone of the Fed. Moreover, the core consumer price index year on year was the highest since April 2017, at 2.1% showing that the inflation is at Fed’s target. As for today, retails sales and business inventories are due.

EUR

EUR/USD traded higher last week and was able to erase all the drop of the first week of the quarter. The Euro’s gains were limited by the dovish tone of the ECB meetings minutes. Traders will be waiting for the CPI numbers from Eurozone on Wednesday.

GBP

The British pound set the highest weekly close since the Brexit vote as investors are optimistic about the outlook of the British economy. The Bank of England is expected to raise rates in May. Major economic reports are due this week, such as the Jobs report and Inflation numbers. These economic indicators will give hints whether the Bank of England will hike in May or postpone.

Gold

Gold prices retreated from the highs of 2018, gold ounce was able to trade at $1365, but the hawkish tone of the FOMC meetings minutes that confirmed the tightening monetary stance of the Federal Reserve weighed on the prices. Gold is still trading in a tight range between $1300 and $1360 but the volume is seen rising which might hint that a breakout might be coming soon.

Oil

Oil started the trading week with a drop of one percent as markets consumed the western air strikes in Syria. Oil Prices ended the week at the highest since late 2014. However, on Friday, a report by the Oil field services company, Baker Hughes, showed that the US energy companies added seven oil rigs drilling for new production in the second week of April, to reach the highest since early 2015.

The most important economic events:

GMT Country Event Expectation Previous
12:30 US Core Retail Sales (MoM) (Mar) 0.2% 0.2%
12:30 US Retail Sales (MoM) (Mar)  0.4% -0.1% 
12:30 US NY Empire State Manufacturing Index (Apr)  19.8 22.5 
14:00 US Business Inventories (MoM) (Feb)  0.6%  0.6%

                                 

Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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