Global stock markets are trading strongly as we enter what could be another crucial week for financial markets. The S&P 500 hit an all time high on Friday as US earnings reports and strong GDP data continued to impress the market and other indices are not far behind. The S&P finished Friday’s session up 0.47% and the Nasdaq and Dow closely followed, up 0.34% and 0.31% respectively. The dollar dropped off slightly from Thursday’s multi year highs but still remains bid against most of the majors, the Dxy trading around 98.00 on the Sydney open today. Oil dropped significantly off of recent highs with news that the Saudi’s may be increasing output in the near future, WTI back to $62.8/b and Brent to $71.6/b and Gold caught a strong bid tone as it continued to bounce well off of recent lows under 1270, trading at 1286 this morning.
Investors will be monitoring a host of indicators this week to assess whether the market can sustain its strong start to the year and push even higher or whether well documented head winds will now start to exert influence and lead to some significant corrections on trading levels. The earnings season rolls on across the globe and there is a plethora of tier 1 data due out as well key Fed and Bank of England policy meetings. On top of this we have a US team once again making the trek to Beijing in a further attempt to thrash out a long awaited trade deal, progress, of the lack of it could have a significant impact on sentiment going forward.
Looking ahead at todays trading sessions and it’s set to be a quiet start to the day with little out in terms of economic data in the Asian session. Japanese markets are closed and will be for the rest of the week as an extended golden week takes place in honour of the new emperor and this could affect liquidity and volatility during the Asian session especially in Jpy pairs. It’s quiet again in the European session although BOE Governor Carney is speaking in London early in the day. The main focus for the US session will once again be earning reports but we also have the core PCE Price Deflator numbers out which will interest investors, especially with the Fed meeting taking place later in the week.