It was a busy week again for financial markets as geopolitical updates on the Gulf continued to dominate market sentiment, while further strong earnings reports kept stock markets trading at record highs.
It is a quieter macroeconomic calendar again in the week ahead, although there is again a major focus on US data as the week progresses, with key inflation numbers due out as well as the Fed Chair Nomination Vote.
Traders will again be looking at newswires for direction for the first few sessions of the week, with the market eagerly awaiting news on whether Iran will accept the latest US proposal and whether we see a swift reopening of the Strait of Hormuz.
There is also the small matter of the planned trip for President Trump to visit President Xi in China for trade negotiations later in the week, which is also likely to see volatility hit markets as updates hit the newswires.
Here is our usual day-by-day breakdown of the major risk events this week:
Updates out of the Middle East will be the major focus for the Asian session again on Monday, with anything fresh on the peace proposal likely to lead to gapping again on the open. The main data drop for the day also comes in the Asian session, with key Chinese CPI and PPI numbers due midway through the day. There is nothing of note on the calendar for the other two trading sessions, and therefore traders are expecting more news-driven markets as the day progresses.
It’s a quiet start to the day on Tuesday, with little likely to hit markets in the first two sessions of the day. However, the New York session has the propensity, at least from a calendar perspective, to be the busiest of the week. Key US CPI data is due out early in the session, while later in the day the Fed Chair Nomination Vote will take place, where Kevin Warsh is expected to be confirmed as the next leader of the central bank.
Australian markets will come into focus early in the Asian session on Wednesday, with Wage Price Index data due out. Again, there is little of note scheduled in the London session today, but the New York day again sees crucial inflation numbers being released out of the US, this time the PPI data, due out shortly after the open.
The Asian session has little on the calendar on Thursday; however, things should pick up in the latter two sessions of the day. The London session sees a big UK data drop early in the day, with GDP numbers the highlight of several scheduled releases. Liquidity may also see a bit of a drop during the session, with Swiss, French and German markets all off for bank holidays. US data will be in focus again shortly after the New York open, with Retail Sales numbers out alongside the usual Weekly Unemployment Claims figures. Later in the day, we hear from several Fed members, including Schmid, Hammack, Barr and Williams, which could add some spice to markets.
There is very little of note on the calendar on Friday to get traders excited. However, given the fact that President Trump is expected to be in China and Middle East updates are likely to continue, traders are expecting another lively day to close out the week.
