The magnitude of yesterday’s rally will have caught many by surprise, and while markets are moving a touch lower this morning it seems like the bulls are still firmly in control. The 10% correction was a nasty shock, but with the end of the year looming there will be a lot of investors looking to jump on board a late-stage rally that will do much to buff performance figures for the year. British American Tobacco’s disappointing numbers today have sent the shares to their lowest level since April, although the strong pound’s impact will diminish in the next update given that sterling is continuing to fall. Speaking of sterling, the currency was given another shove in the direction of $1.60 as minutes from the BoE pointed towards a delay in interest rate hikes. This backs up the public statements made last week at the height of the market’s volatile period, but it illustrates how the attempt at clear forward guidance simply leaves the bank at the mercy of events.
Yahoo picked up the baton from Apple last night, keeping markets in positive mood thanks to good earnings numbers, but the big event is likely to be the CPI reading. Downward pressure on the number is likely to come from the broad selloff in oil prices, which gives the Fed additional wiggle room on monetary policy, even if QE is still set to leave us next week. More important is the outlook on rates and in this the FOMC is likely to emulate the BoE in due course, signalling that renewed global headwinds will be the key worry regarding the outlook for the US economy. Ahead of the open, we expect the Dow to start 30 points lower at 16,586.
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EUR/USD steady below 1.0800 after US PCE meets expectations
EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips. Fed Chair Jerome Powell set to speak ahead of the weekly close.
GBP/USD hovers around 1.2620 in dull trading
GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.
Gold price sits at all-time highs above $2,230
Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.
Key events in developed markets next week
Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.