Weekly Alpha

News Recap: US equities currently remain near or at all-time highs

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Markets in Asia started the week with a negative bias as the region followed on from last Friday’s US session although sentiment began to improve as participants looked towards the opening of European markets. The ASX 200 was higher by around 0.4% supported by gains in the energy sector whilst the Nikkei 225 slumped close to 1% with Softbank and Fast Retailing being the biggest losers. In China, a spokesperson for the National Health Commission outlined that the most recent Covid outbreak covers 11 provinces with cases expected to rise further.

UK Focus

In the UK, Chancellor Sunak is set to announce the UK Budget later in the week and has cited that inflation and interest rates have been key factors to bear in mind ahead of the release. Sunak has reiterated that there must not be a return to significant economic restrictions despite the number of cases continuing to rise as the nation heads into the Winter period. The budget on Wednesday is set to see the minimum wage raised whilst restrictions on public sector pay lifted.

The Week Ahead

The week ahead will see participants digest a bout of economic data with the focus on Central Bank meetings and US Earnings set to dominate the agenda. Companies representing over 40% of the S&P 500’s market value are due to post their quarterly results this week and financiers will have a watchful eye on whether the growth that has been seen previously will continue at the same rate. US equities currently remain near or at all-time highs with the only exception being the Nasdaq which tends to be more sensitive to the rise in yields.

Cryptocurrency News

Bitcoin closed lower last week despite having broken its previous all-time high. The Cryptoasset traded up above the $66,000 level before pulling back to close the week down near 1%. The break higher followed the announcement of trading for the first Bitcoin futures ETF which became the first of its kind to breach the $1bln mark for AUM in under 2 days.

WTI Crude News

Oil markets continued to rally last week, with Brent Crude breaking to its best levels since 2014. The recent appreciation has now brought the year-to-date gain to over 70% as the asset has recovered from the extreme lows witnessed last year. Looking ahead, oil traders will continue to digest supply and demand developments, with Nigeria being the latest nation to join Saudi Arabia opposing any sudden announcements to production increases beyond the current OPEC+ quotas.

Here is a breakdown of the high impact data releases this week.

Wednesday

01:30 Trimmed mean CPI & CPI q/q. Markets to watch: AUD Crosses

15:00 BOC Monetary Policy Report & Rate Statement. Markets to watch: CAD Crosses

16:00 BOC Press Conference. Markets to watch: CAD Crosses

Thursday

Tentative BOJ Outlook Report. Markets to watch: JPY Crosses

12:45 Monetary Policy Statement. EUR Crosses

13:30 ECB Press Conference. Markets to watch: EUR Crosses

13:30 Advance GDP q/q. Markets to watch: USD Crosses

Friday

13:30 GDP m/m. Markets to watch: CAD Crosses.

13:30 Core PCE Price Index m/m. Markets to watch: USD Crosses

Tentative Treasury Currency Report. Markets to watch: USD Crosses


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