Global markets experienced another strong week last week, with some stock indices again hitting fresh record levels, and US data indicated a resilient economy, pushing back on Fed rate cut expectations.
There is the potential for a lot more volatility in the week ahead, geopolitics likely to play a major role as we progress through the trading days and key earnings reports due out.
Japanese elections are taking place over the weekend, which could see a busy opening session for the week, whilst tariff updates will, of course, remain front of mind for many, and there is a major interest rate update from the European Central Bank later in the week.
Here is our usual day-by-day breakdown of the major risk events this week:
The Asian session is set to be a busy one on Monday, as traders first react to the Japanese election results, with volatility expected in the Yen despite Japanese markets being closed for a bank holiday. New Zealand CPI numbers are also due out before focus moves north to China for the latest Loan Prime Rate updates. There is little scheduled on the calendar in the latter two sessions, but tariff updates could weigh on sentiment.
It should be a quieter start to the Asian session on Tuesday, although Australian markets will come into focus early in the day with the RBA Monetary Policy Meeting Minutes due out. Central bankers will be in focus in the London and New York sessions, with the Bank of England’s Governor Andrew Bailey set to testify in London and Fed Chair Jerome Powell speaking in Washington. The Richmond Manufacturing Index data is also due out later in the day.
It is a much quieter macroeconomic calendar day on Wednesday, with little due out across all three trading sessions. Existing Home Sales numbers are due out in the US; however, expect sentiment to be dominated by geopolitical updates and some key earnings reports later in the day in the US that include Alphabet.
It is Flash PMI day on Thursday, with both Services and Manufacturing numbers due out across a plethora of jurisdictions, including Australia, France, Germany, the EU, the UK, and the US. There is also a strong central bank influence through the day, with the RBA’s Michelle Bullock speaking during the Asian session and the key ECB interest rate update in the London day. US Weekly Unemployment Claims and New Home Sales numbers are also due out in the final session.
It is a quieter day on Friday, although there is enough for traders to get their teeth into on the calendar. The initial focus in the Asian session will be on Japanese markets, with the key Tokyo CPI data due out. The European session will see the early focus on UK markets for the Retail Sales data, before focus jumps across the Channel to Germany for the IFO Business Climate data. The New York session has Durable Goods data due out early in the session before what may be smoother trading conditions into the weekend.
