The market has endured very quiet holiday trading conditions over the last few days but investors will be looking for an increase in volatility in the days ahead as traders return to desks and earning season in the US steps up. US markets had a quiet day yesterday with the majority of Europe on holiday for Easter Monday, the Dow closed down 0.18% but the S&P and Nasdaq managed to creep higher in light trading, finishing the day up 0.1% and 0.22% respectively. The FX market was very quiet with most of the major pairs trading in very tight ranges, the dollar is still relatively well bid as we start the new week with the Dxy trading around 97.30. Oil did see some volatility as it once again jumped higher on the back of the US advising that it will be removing waivers that allowed the purchase of some Iranian crude, WTI up to $65.8/b and Brent up to $74/b.
This week could give a strong indication of whether the dramatic dovish turn from global central banks and in particular the Fed over the last few months has been enough to change the global growth dynamic. Some of the worlds biggest technology companies are reporting earnings this week as well as a raft of the big European banks. Investors will be hoping for some better than expected results from both groups to keep the topside momentum in global equities, however if the data starts to show a significant slowing across these key industries then expect both stocks and risk trades to start to come under some heavy pressure.
Looking ahead to todays trading and expect the market to have a slow start as trading desks get back to full capacity after the Easter weekend. There is very little in the way of impactful fundamental economic data releases on the calendar today and investors will once again be looking at sentimental drivers and the news wires until we hit the harder data as we get into the trading week proper.