Fed Speakers Eyed After Strong Start to 2018

Investors Optimistic Ahead of Q4 Earnings Season

After an impressive opening week to the year, US futures are pointing to a flat open on Wall Street on Monday, with investors eyeing a few key data points and the start of fourth quarter earnings season.

Heading into another earnings season, there is a strong sense of optimism in the markets, with the Dow having blown past 25,000 with relative ease before ending the week with a record close. While we’re currently looking at a flat start, the US may take some direction from Asia and Europe as we approach the open with both regions having posted/posting moderate gains at the start of the week.

Dollar Bulls Still Not That Confident

USD Sentiment Remains Bearish

The US dollar is taking another stab higher this morning after its false start last week but it’s clearly struggling for any upward momentum. Sentiment towards the greenback has softened considerably despite the passing of tax reform in the US, something many thought may have been a positive for the currency. Given the downside we’ve seen in the dollar over the last month, we could see a small correction although as of yet, there doesn’t appear too much appetite for upside.

US Dollar Index Daily Chart

Source – Thomson Reuters Eikon

Perhaps today’s Federal Reserve speakers will provide the catalyst for a move higher in the dollar, with John Williams, Raphael Rostic and Eric Rosengren all making appearances. Williams and Rostic will both be voters on the FOMC this year and so their views will be very closely monitored and could have an impact, although with Jerome Powell set to succeed Janet Yellen as Chair next month and a number of roles still to be filled, there remains an element of uncertainty when it comes to Fed policy going forward.

A shadow from the past

Key Data Releases Due on Friday

While there is a number of key data releases that will be closely monitored this week, the bulk of these will come later on, most notably US retail sales and CPI inflation on Friday. Friday will also mark the start of earnings season which will be a key focus for investors over the coming weeks now that tax reform is over the line.

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 Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.