Stocks Rise on Earnings Outlook, Dollar Steady

US Equities

US Stocks rose on Tuesday as Netflix posted earnings and powered the earnings season outlook. Stocks gained one percent boosted by technology companies, and expectations that this earnings season is going to be the strongest in Seven years. Ten of eleven major S&P sectors were in green. American companies are set to benefit from the weak US dollar and tax plans. Since Trump was elected the dollar dropped almost thirteen percent and major indices rose by almost fifty percent.

USD

The dollar was steady against commodity currencies and Euro. The dollar index changed a little to the upside on upbeat housing and industrial production data. FOMC member Dudley is due to speak about the economic outlook and monetary policy at the City University of New York’s Lehman College.

EUR

On Tuesday, the euro dropped from a three weeks high on soft ZEW numbers to trade at low of $1.2335. The research institute survey showed that the Sentiment of the German investor reached the lowest since 2012. Eurozone consumer price index is due, analysts expect a good readings on the MoM figures.

GBP

The British pound reversed off the highs, after trading at the best levels since the Brexit referendum. The cable faced pressure after the Job report showed that the earnings came in lower than expected which might delay the interest rate hike by the Bank of England. The Monetary Policy Committee confirmed that they will need to see a rise in wage pressures before raising rates. Inflation numbers from the United Kingdom are due today.

CAD

The Canadian dollar has been consolidating for the past trading week, as traders are waiting for any progress on NAFTA deal, and economic indicators that might signal the next step for the Bank of Canada. Bank of Canada raised rates in December 2017, citing a positive outlook in the economy. But after, the uncertainty of a NAFTA deal and small drawback in the economic figures, the Bank of Canada is now on hold and is expected to keep rates at 1.25% in today’s meeting.

Gold

Gold prices are trading in a tight range between $1353 and $1333 as the geopolitical tensions eased. Gold prices came in under pressure as economic figures from U.S. showed that the economy is still solid which will continue supporting the tightening attitude of the Federal Reserve.

Oil

Oil prices rose slightly on lower U.S. crude inventories and global supply risks. A report by the American Petroleum Institute showed on Tuesday that the U.S. crude oil inventories dropped by 1 million barrels last week to 428 million barrels. Data by the Energy Information Administration is due today. Moreover, the fears of supply disruption due to the Middle East crisis and the falling output from Venezuela is supporting oil prices.

The most important economic events:

GMT Country Event Expectation Previous
8:30 UK CPI (YoY) (Mar) 2.7% 2.7%
8:30 UK Core CPI (YoY) (Mar) 2.5% 2.4%
8:30 UK CPI (MoM) (Mar) 0.3% 0.4%
9:00 EU Core CPI (YoY) (Mar) 1.4% 1.4%
9:00 EU CPI (YoY) (Mar) 1.4% 1.4%
14:00 CA BoC Interest Rate Decision 1.3% 1.3%
14:00 CA BoC Monetary Policy Report
14:30 US Crude Oil Inventories -0.500 3.306
19:15 US FOMC Member Dudley Speaks


Disclaimer
The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

ICM Capital Review