Markets Calm Ahead of Busy Week

It’s been a moderately positive start to trading on Monday, with stocks in Europe squeezing out small gains which is lifting US futures ahead of the open on Wall Street.

Earnings, Central Banks and Data Galore This Week

There’s going to be no shortage of catalysts this week with earnings season being accompanied by major central bank announcements and big economic data. Arguably the two most notable events will be the Bank of England decision and US jobs report, both of which will come later in the week, but there’s still plenty to watch out for before then with this morning already seeing unemployment and inflation data from the eurozone and PMI data from China.

Dollar Weighed by Month End Flows and Political Tensions

EUR Pops Higher as Unemployment Falls to Nine Year Low

The euro was briefly boosted by the euro area data which again showed the economic recovery gaining traction as unemployment fell to its lowest level since February 2009 and core inflation creeping higher. While this will be music to the ears of policy makers at the ECB as they prepare for further reductions in asset purchases later this year, it’s worth remembering the low base that the region is recovering from.

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Unemployment at 9.1% is still extremely high and when you break that down by country, it becomes much higher again in some places. Core inflation is also only at 1.3% which is still well below the ECBs target and with the currency appreciating strongly this year, downward pressures here will continue to build. The central bank should therefore tread very carefully when it comes to removing stimulus, as I expect it will.

US Data Eyed as Busy Week Gets Off to a Slow Start

Today is a little quiet on the earnings front, with the likes of Apple and Pfizer not reporting until tomorrow. It’s also quiet on the data side with pending home sales and the Chicago PMI the only numbers scheduled for release. We may therefore see traders positioning themselves ahead of the rest of the weeks major events today, with a bad jobs report on Friday delivering another blow to the possibility of another rate hike this year.

Venezuela To Prop Up Oil And Gold

Economic Calendar

For a look at all of today’s economic events, check out our economic calendar.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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