As a forex trader, one of the essential parts of your day should be keeping a keen eye on the market updates. It provides a snapshot of global economic health and the factors affecting the currency market. Here's a simplified daily morning market update tailored for beginners.
An Exciting Week Ahead
This Monday, the market is prepared for an exciting week brimming with earnings reports and central bank meetings. These events are likely to drive higher interest rates in Europe and the United States, possibly signalling the end of the monetary tightening cycle in both regions. The U.S. Federal Reserve and the European Central Bank are both expected to hike by a quarter-point.
However, rather than confirming the peak of interest rates, analysts expect Federal Reserve Chair Jerome Powell and ECB President Christine Lagarde to retain a bullish stance and keep their decisions dependent on data. On the contrary, the Bank of Japan is likely to maintain its ultra-loose policy, with some speculations of a minor adjustment to its yield curve control stance.
The Earnings Parade
From the tech industry to consumer goods, an array of major companies are set to report their earnings this week, including Alphabet, Meta, Intel, Microsoft, GE, AT&T, Boeing, Exxon Mobil, McDonald's, Coca Cola, Ford, and GM. These reports will need to validate the S&P 500's earnings multiple of 20 and its gains of 19% year-to-date.
Asian Market Movements
Stocks in Asia have mostly advanced, with Japanese stocks rising due to reports suggesting that the Bank of Japan isn't in a hurry to address the side effects of its ultra-loose monetary policy. On the other hand, shares in Hong Kong and China declined due to apprehension surrounding Beijing's pledges to boost consumption and businesses.
US Market Status
Meanwhile, in the US, shares remained mostly flat after the S&P 500 closed with little change on Friday. There's ongoing selling in technology companies following a batch of disappointing results.
In the currency market, the Japanese yen rose after falling more than 2% last week. Treasury yields were unchanged in Asian trading hours, while long-dated Australian and New Zealand bond yields fell.
What's Coming Up? Forex: Daily Morning Market Update
In the coming week, all eyes are on the earnings reports from big names such as Alphabet Inc., Exxon Mobil Corp., and Meta Platforms Inc. The Fed and the European Central Bank are expected to raise interest rates and provide indications of future hikes. On the commodities front, oil has edged down, and gold remains unchanged following a slip against a stronger dollar on Friday.
Key Events to Look Out for This Week:
- Eurozone S&P Global Manufacturing & Services PMI, Monday
- UK S&P Global / CIPS UK Manufacturing & Services PMI, Monday
- US Conf. Board consumer confidence, Tuesday
- US new home sales, Wednesday
- FOMC rate decision, Fed Chair Powell news conference, Wednesday
- China industrial profits, Thursday
- ECB rate decision, Thursday
- US GDP, durable goods orders, initial jobless claims, wholesale inventories, Thursday
- Japan Tokyo CPI, Friday
- BOJ rate decision, Friday
- Eurozone economic confidence, consumer confidence, Friday
- US consumer income, employment cost index, University of Michigan consumer sentiment, Friday
Understanding forex and the factors that impact it is crucial for every trader, be it a beginner or an experienced one. This daily market update should give you a sense of what's happening in the world economy and how it can impact your forex trading decisions. Remember, being aware of market trends is the first step towards successful forex trading.
Happy Trading in Forex: Daily Morning Market Update!
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