27.03.23 - 31.03.23
Results of the previous week
| BRN +6.55% | ES +2.85% | XAGUSD +2.67% |
NG -6.82% | VIX -5.17% | COFFEE -3.39% |
American indices continued their moderate growth. This was largely attirbutable to reduced concerns over the risk of a full-scale banking crisis. Moreover, markets currently estimate the probability of a 0.25% rate hike at the next Fed meeting at 55%. This means they are banking on a somewhat more dovish stance from the regulator, which will help buoy stocks and indices.
However, the Fed's less hawkish position is bad news for the dollar. The US national currency spent most of the week under pressure, while the euro and sterling were able to recover lost ground despite significant deficit increases in major eurozone economies (e.g. Germany and France). Yet traders expect that the ECB and BoE will continue to raise rates in a bid to reduce inflation, which should buoy both the euro and pound.
Brent oil managed to regain some of its earlier losses as the energy resource received a boost amid a general uptick in demand for risk assets. Another positive for oil prices are concerns over supply interruptions. It was revealed that around 400,000 bpd stopped being exported after Turkey ceased transporting oil from Kurdistan at the request of the Iraqi authorities.
Key events of the current week
Germany. Services PMI | DATE 05.04 | GMT | FORECAST | PREV. | IMPORTANCE |
The German services sector is gradually coming out of recession. Over the past couple of months, this indicator has held steady above 50, which suggests rising activity in the services sector. The gradual decline in inflation is also helping this indicator to improve. Forecasts predict that this positive trend will continue and that will have a favourable effect on economic growth as a whole. If the true data are in line with expectations, this will buoy the single currency.In such an eventuality, the EUR/USD will likely pull back to the 1.11000 mark. | |||||
The US. Services PMI (ISM) | DATE 05.04 | GMT | FORECAST | PREV. | IMPORTANCE |
The services sector is absolutely central to the US economy. Despite relatively high inflation, this indicator remains in growth territory, which is helping to buoy the economy. Thus, the relatively decent macroeconomic data will enable the US Federal Reserve to press on with its hawkish monetary policy. Such expectations will stoke demand for the dollar, which will help it to strengthen against its major competitors. If the data confirm the market's predictions, this trend could continue. In such a scenario, we could see the cable get back up to somewhere around 1,2215. | |||||
The US. Non-farm payrolls | DATE 07.04 | GMT | FORECAST | PREV. | IMPORTANCE |
The US labour market continues to look relatively stable. The economy is creating new jobs at a fairly high rate. What's more, unemployment remains at a multi-decade low. The favourable labour market conditions leaves the door open for the Fed to make further rate hikes to curb inflation, which still remains well above the regulator's target level. This, combined with concerns over a potential banking crisis, could have a negative impact on US stocks. If the non-farm payrolls report is positive, this could weigh further on the S&P 500 (ES), pushing it down to somewhere around 3950.00. | |||||
