Markets Week Ahead: Dow Jones, S&P 500, US Dollar, Non-Farm Payrolls
Market sentiment started off on a strong footing last week, though risk appetite notably deteriorated as Friday wrapped up. This left the S&P 500 and Dow Jones closer to levels reached in early to mid-April. The haven-linked US Dollar trimmed losses as the sentiment-oriented Australian Dollar gave up most of its gains. Gold prices lost some downside momentum.
Investors may have been spooked that US-China trade tensions could resurface. President Donald Trump hinted at the possibility of retaliatory tariffs for how China handled the coronavirus outbreak. This comes amid the global economy suffering amid social distancing guidelines. Meanwhile earnings from Amazon and Apple revealed a detachment from the real economy.
Earnings season continues in the week ahead with companies such as Zillow, PayPal, AIG and CVS reporting. Meanwhile some US states are taking measures to relax lockdown measures such as Texas. California’s Governor Gavin Newsom hinted he could announce plans towards reopening the economy this week. Parts in Europe have also been slowing moving in this direction.
All eyes this week also turn to April’s US non-farm payrolls report. The world’s largest economy is expected to lose over 21 million jobs as the unemployment rate surges to 16.0% from 4.4%. The deterioration of the labor market is expected to be the most damaging since records started being kept in the late 1930s. New Zealand and Canada will also release their jobs report.
The recent pullback in gold may gather pace in May as the Reserve Bank of Australia (RBA) and Bank of England (BoE) are expected to keep interest rates at a record low.
Renewed political turmoil and weakening data give USD/MXN the support needed to regain the bullish momentum.
Global equity markets weathered two important central bank decisions last week, but more lie ahead and economic data continues to deteriorate. Will volatility reemerge?
The recent pullback in the oil complex is battling resistance, making further upside difficult to call. The negative backdrop remains firmly in place for now.
USD/JPY has printed a multi-week low meanwhile, AUD/JPY printed a multi-week high. Key chart signals for the upcoming week.
Bearish reversal across global equities raises the risk that a potential top has been placed.
Gold prices face a couple of bearish warning signs as prices trade in a neutral setting. Will an Evening Star and a Double Top precede a material shift in XAU/USD’s trajectory?
US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD
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