News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Bullish
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • Italian PM Conte confirms to cabinet that he is resigning - government source https://t.co/tYi5sjp79w
  • BoJ's Kuroda says monetary policy does have some limits in trying to achieve inflation target $JPY
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 100.00%, while traders in EUR/JPY are at opposite extremes with 66.22%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/RaCg87Zqau
  • Yen, Dollar May Extend Rise as Stocks Fall After China Drains Liquidity - https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2021/01/26/US-Dollar-May-Extend-Rise-as-Stocks-Fall-After-China-Drains-Liquidity.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #Dollar #jpy #China #PBOC https://t.co/l14R7r65XH
  • What is your forex trading style? Take the quiz and find out: https://t.co/YY3ePTpzSI https://t.co/YPng7ACJtV
  • Commodities Update: As of 08:00, these are your best and worst performers based on the London trading schedule: Silver: 0.13% Gold: 0.05% Oil - US Crude: -0.36% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/EPww5cFVWS
  • 'We're going on bear hunt....' https://t.co/ejyyLFmhj8
  • Forex Update: As of 08:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: -0.02% 🇨🇭CHF: -0.08% 🇪🇺EUR: -0.10% 🇳🇿NZD: -0.22% 🇦🇺AUD: -0.33% 🇬🇧GBP: -0.38% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/A3NmWO1BdA
  • Indices Update: As of 08:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.24% FTSE 100: 0.16% France 40: -0.05% Wall Street: -0.46% US 500: -0.54% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/HpRrB8QiTm
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here: https://t.co/yOUVEEqhc5 https://t.co/0hlGXm3Z43
Global Headwinds Could Have Mixed Impact on US Earnings

Global Headwinds Could Have Mixed Impact on US Earnings

Ilya Spivak, Varun Jaitly,

Talking Points:

  • Impact of global commodities rout on earnings may vary
  • Banks’ earnings eyed to gauge impact of China turmoil
  • US Dollar may help domestic consumers, hurt exporters

Losing Money Trading the US Dollar? This Might Be Why.

Currency markets have mirrored volatility across global stock exchanges in the early days of 2016. This puts the spotlight on the fourth-quarter corporate earnings reporting season in the days ahead, with traders looking to share prices as a potentially formative driver for price action across the asset class spectrum.

Since the last earnings season, familiar headwinds including the slowdown in China and a firming US Dollar remain in the spotlight. Indeed, the potential for negativity on both fronts has arguably firmed after the Federal Reserve issued its first post-QE rate hike in December and Beijing attempted further Yuan devaluation while battling equity market volatility, setting off aggressive risk aversion. While the latest developments are unlikely to appear in upcoming fourth-quarter earnings numbers, traders will size up the results through the prism of recent volatility.

The drop in global commodity prices represents a telling intersection of the dominant themes at play. Most global commodities are priced in terms of US Dollars and China is the largest source of demand for raw materials. This makes the broad-based trend in commodities a useful bellwether for the bigger-picture forces shaping earnings trends.

Weaker commodity prices have both positive and negative implications for US corporate earnings. For example, refined petroleum is the US’s top export commodity, accounting for roughly 7.2% of cross-border sales (totaling $102 billion). This has meant that oil refineries and producers struggle to maintain profitability. On the other hand however, US car companies are seeing an increase in demand as cheaper fuel emboldens buyers. In a similar way, falling metals prices have hurt producers’ bottom line but fueled demand in advanced manufacturing industries, like aerospace. With these factors in mind, commodities’ impact on the US earnings season may yield a mixed bag of outcomes.

China-linked volatility has become a strong theme driving markets in early 2016 and traders will look to earnings announcements to size up prior vulnerabilities as they gauge the likely fallout from the latest selloff. The impact of sentiment swings on banks and investment firms is likely to be of paramount interest. The selloff in China has spilled over into the wider markets. This may hurt a host of the major financial institutions’ activities, including credit provision, trading and portfolio management.

The implications of US Dollar strength are likewise conflicting. While this may help global export growth, it may also have adverse effects on US-based exporters. However, it is important to note that US household consumption accounts for roughly 68.4% of GDP. A stronger USD boosts consumers’ purchasing power, which may ultimately prove supportive for US growth and that of the world at large. Needless to say, this could ultimately amount to be a positive narrative for earnings. Traders will look for evidence of such a scenario in earnings reports from companies delivering consumer staples as well as retail-oriented tech stocks.

Global Headwinds Could Have Mixed Impact on US Earnings

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

DISCLOSURES