Global stocks started to drift lower in trading as a worse than expected results in US earnings weighed on market sentiment. It was a relatively quiet start to the trading week with little in the way of fresh market drivers to inspire strong moves in either direction, US equities faded later in the day as Goldman Sachs earnings report disappointed with the major indices all closing just under flat. The foreign exchange market was very quiet once again with the majors all trading in extremely tight ranges with the one exception of the Cad which dropped as the BOC business outlook turned negative. Commodities also dropped again with Oil lower as US rig activity increased, WTI at $63.50 and Brent just above $71, Gold remains below 1290.
US earnings season continues to bring updates thick and fast in the next few days and with little else changing from a macro perspective, they will continue to influence market direction in the short term. Investors will be carefully monitoring the big players as well as looking at the season as a whole. Any further signs that corporate America is suffering in light of the plethora of head winds that the market is facing could lead to some significant downside corrections over the next couple of weeks especially with thinner liquidity conditions around the Easter holidays. Conversely if we see good signs of resilience from the market, this may be enough to induce further gains for global stock markets across the board.
Looking ahead to today’s trading and the main focus in the Asian session will be the latest release of the RBA’s Monetary Policy Meeting Minutes this morning. There’s little else due out in the Asian session but the London open could see an increase in activity, first up is the latest employment data in the UK and this is followed swiftly by the German ZEW Economic Sentiment number. The US session is light on economic data releases but the focus will be on the latest earnings reports.