Caution ahead of bumper week

A cautious start to the week as investors prepare for an onslaught of earnings and data, not to mention the Fed meeting on Wednesday.

It should be a thrilling week and it comes on the back of a hugely impressive bounceback. Last Monday it was all doom and gloom, this week it’s very different. Earnings season is off to a great start and the tech giants are in town this week so it promises to be an exciting one.

If that wasn’t enough, the Fed meeting on Wednesday is hotly anticipated as investors look for clues as to when the central bank will start to unwind its crisis response to the pandemic.

Add to all of this a collection of big economic figures – advance GDP, PCE inflation, personal income and spending, among others – and we have quite the week on our hands. It’s hardly surprising that we’re seeing a little caution, especially against the backdrop of a four day rally and fresh record highs.

As is so often the case, Monday is the calm before the storm. The action may not really get underway until after the close on Tuesday when Apple and Alphabet report, but then things will pick up dramatically going through to the end of the week. At which point we’ll probably all need a good rest.

Bitcoin higher as short covering triggers surge

Bitcoin is flying once again and it would appear the credit is going to Amazon, or more specifically a job posting at the company related digital currency and blockchain strategy. What that actually means is anyone’s guess but what it does do is excite crypto enthusiasts and gets the rumour mill pumping.

The job posting can’t take all the credit though. Elon Musk last week did a fine job of dragging cryptos off their lows with his disclosures around personal holdings and the possible future of Tesla transactions, so things were already looking up. And it seems some significant short covering is taking place as bearish traders have seen the writing on the wall and rushed to the exits, after seeing what bitcoin can do when the bulls take control. It promises to be another interesting week for the space.

For a look at all of today’s economic events, check out our economic calendar. www.marketpulse.com/economic-events/

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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