Ending the week on a high

Stock markets are poised to end the week on a positive note although broadly speaking, it doesn’t seem we’ve progressed in either direction over recent weeks.

Trading has become very choppy as the economic data has turned more problematic and interest rate expectations have flipped. Investors are now waiting for evidence that the January figures were the blip many expect they were, driven by unseasonably warm weather, and next Friday’s jobs report will be the first such tier-one release.

Until then, we may see more fluctuations in the markets, although there are some interesting releases in the interim, not to mention the two appearances by Fed Chair Jerome Powell in Congress during the week. I can’t imagine he will pivot too dramatically in either direction as the data has largely evolved as the Fed feared, but you never know and any shift toward the hawkish end of the spectrum may resonate more than normal given recent developments.

More signs of optimism for China

The services PMI data released today were mostly revised numbers from Europe but the Chinese Caixin release once again surprised in a positive way, which may be part of what’s lifting sentiment late in the week. The transition is clearly going well and this is the latest survey that backs up that belief.

There’s naturally still a long way to go and the scale of the recovery may depend on how much economic and monetary support is on offer over the coming months, or whether policymakers even deem it less necessary on the back of recent indicators.

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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