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Markets Week Ahead: Nasdaq 100, Tech Earnings, Euro, ECB, Canadian Dollar, BoC, Yen, BoJ

Markets Week Ahead: Nasdaq 100, Tech Earnings, Euro, ECB, Canadian Dollar, BoC, Yen, BoJ

Daniel Dubrovsky, Strategist

Global risk appetite was mixed last week, depending on what continent you were looking at. On Wall Street, the Dow Jones, S&P 500 and Nasdaq 100 gained about 1.11%, 1.64% and 1.38% respectively. Tech stocks saw a hiccup following disappointing earnings from Snap Inc. and Intel. In Europe, the Euro Stoxx 50 and FTSE 100 ended +0.14% and -0.41% respectively.

In the Asia-Pacific region, Japan’s Nikkei 225 fell 0.91% as the Hang Seng soared 3.14%. Taking a look at major currencies, the Dollar still broadly underperformed. The Japanese Yen managed to trim recent aggressive losses. Rising concerns about inflationary pressures have pushed up breakeven Treasury yields, perhaps pushing traders into the anti-risk JPY.

Taking a look at commodities, anti-fiat gold prices managed to climb this past week. However, rising government bond yields may keep the yellow metal from achieving its full potential. Ongoing concerns about supply shortages, OPEC+ output underperformance and the global economic reopening likely kept crude oil prices elevated.

Top-tier economic event risk include the ECB, BoC and BoJ rate decisions for the Euro, Canadian Dollar and Japanese Yen respectively. Traders will continue watching how central banker’s are viewing inflationary trends. The first estimate of third-quarter US GDP will also cross the wires and is expected at 2.7% q/q, far lower than the 6.7% outcome in Q2.

All eyes will shift towards Core PCE data on Friday, which is the Fed’s preferred gauge of inflation. A slew of highly-anticipated tech earnings are also expected to cross the wires such as Amazon, Apple and Facebook. This leaves risk appetite vulnerable should these disappoint. What else is in store for markets in the week ahead?

US DOLLAR WEEKLY PERFORMANCE AGAINST CURRENCIES AND GOLD

Markets Week Ahead: Nasdaq 100, Tech Earnings, Euro, ECB, Canadian Dollar, BoC, Yen, BoJ

Fundamental Forecasts:

US Dollar Forecast: Greenback Vulnerable to Slowdown in US GDP

The update to the US GDP report may keep the Greenback under pressure as signs of a slowing recovery undermines speculation for an imminent shift in Fed policy

S&P 500 & FTSE 100 Forecasts for the Week Ahead

US equities back to record highs, but inflation concerns remain. FTSE eyeing EU-UK spat

Euro Forecast: ECB Meeting Will Aim to Keep EUR/USD Stable, All Settings Unchanged

The European Central Bank will consider it a job well done if there is no movement in EUR/USD or the Euro crosses before, during or after Thursday’s policy announcements by its Governing Council.

Bitcoin (BTC), Ethereum (ETH) Pare Recent Heavy Gains, Solana (SOL) Keeps on Rallying

The cryptocurrency market is ending the week on a mildly cautious note but the outlook remains positive.

British Pound Weekly Forecast: Inflation Expectations and New Covid Cases; Poor Retail Data

November rate hike odds around 50% and a rise in new Covid cases threatens to dampen the services sector as the UK braces for winter.

Australian Dollar Outlook: AU-US Yield Spreads the Driver, Will it Steer AUD/USD Up?

The Australian Dollar ran up on widening yield differentials and commodity tailwinds. If those conditions ease, where will that leave AUD/USD?

Canadian Dollar Forecast: USD/CAD Drop Supported by Crude Oil, Will BoC Disappoint?

The Canadian Dollar remains supported amid elevated crude oil prices. Don’t be surprised if the Bank of Canada disappoints aggressive hawkish expectations. Earnings season is a wildcard.

Technical Forecasts:

British Pound (GBP) Technical Setup: GBP/USD Tests Channel Resistance

Pound Sterling has been on an upward trajectory ever since financial markets are pricing in interest rates of 1% by September next year. Could this overestimate result in a change in momentum for GBP bulls?

Crude Oil Technical Forecast: WTI Price at Risk of a Brief and Moderate Pullback

Oil maintains a medium-term bullish outlook, but its overbought condition and price's proximity to key technical resistance may pave the way for a brief pullback before the next leg higher.

Japanese Yen Forecast: USD/JPY Snaps Back- Can Yen Bulls Drive It?

US Dollar snapped a six-week winning streak against the Japanese Yen with USD/JPY reversing off technical uptrend resistance. The levels that matter on the weekly technical chart.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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