Markets Yawn and Hit Snooze Button Ahead of US Earnings Reports

Asian shares are tired and struggling for direction this morning due to a lack of fresh market-moving news, with investors on the side-lines ahead of earnings reports from major American companies.
Lukman Otunuga

Open your FXTM account today

Although Wall Street closed again at record highs overnight, this positive momentum is unlikely to rollover into Tuesday’s session given how market players are adopting a wait-and-see approach. The mood across financial markets will certainly be influenced by US corporate earnings, especially the performance of major US banks like JP Morgan, Goldman Sachs and Wells Fargo. Should earnings disappoint investor expectations, risk aversion is set to make a rude return and sadly global equity markets will be in the direct firing line.

Dollar creeps higher before US Retail Sales

The Greenback is having a hard time nursing deep wounds inflicted by Fed rate cut bets and this continues to be reflected in the Dollar Index which is trading around 97.00 as of writing.

More pain could be in store for the bruised Dollar this afternoon if US retail sales prints below market expectations. Economists are forecasting a tepid 0.1% expansion in sales for the US economy last month. Given how consumption contributes to almost 70% of US GDP, a disappointing figure will not only fuel concerns over the US economy but strengthen the case for a US interest rate cut this month – ultimately punishing the Dollar. With the fundamental ingredients initially sweetening appetite for the Dollar expired, weakness could be a major theme during the second half of 2019.

Currency spotlight – GBPUSD

For as long as Brexit uncertainty, political risk in Westminster and BoE rate cut bets remain major themes – Sterling is poised to remain depressed and unloved in the G10 space.

The British pound slipped towards six-month lows against the Dollar this morning and is likely to extend losses as the bitter cocktail of negative themes swirling around Brexit and UK growth sour appetite for the currency.

Focusing on the technical picture, the GBPUSD is under pressure on the daily charts. A breakdown below 1.2500 should encourage a move lower towards 1.2420.

Commodity spotlight – Gold

Gold has the potential to shine with intensity this week if US corporate earnings disappoint and the tired Dollar depreciates.

Appetite for the yellow metal remains supported by expectations of a US rate cut this month, a timid Dollar and ongoing concerns over slowing global growth. For as long as these core themes weigh on global sentiment, bulls remain in a position of power. Focusing on the technical, an intraday breakout above $1419 should signal a move higher towards $1430 in the short to medium term.


Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US