A bit flat

Equity markets look a little flat on Thursday, perhaps a sign that we’ve entered into a waiting period ahead of some major data releases and central bank meetings.

This month was always effectively split into two dominant weeks, the first of the month which included the jobs report that proved extremely impactful. And then next week when we get a flurry of interest rate decisions and some big data releases. This week was always going to be the void in the middle and that’s how it’s largely played out, with the ripple effects from Friday’s jobs data continuing to dictate sentiment.

Of course, developments in China have a big role to play, although as we’re seeing once again, Covid-related moves are almost exclusively impacting stocks in domestic markets. We can see that again overnight, with reports of looser mask and isolation requirements in Hong Kong lifting the Hang Seng and making it the clear outperformer in the region, while most other indices tread water. ​

There is, of course, US PPI to come tomorrow which could give investors a welcome boost ahead of the main event next week. That said, while probably indicating lower price pressures in the pipeline, it doesn’t alleviate the concerns thrown up by the jobs report last week of strong wage growth and the threat of entrenched inflation. So it will be interesting to see how investors react to the PPI report, coming so close to next week’s CPI release and Fed decision.

No making up for lost time

With risk appetite not improved, bitcoin continues to trade below $17,000 and awaits upcoming data. The headlines haven’t been favourable recently although the FTX fallout has cooled somewhat. Unfortunately for bitcoin, the timing means it never participated in the last risk rebound and there isn’t much appetite to make up for lost time.

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

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Craig Erlam

Craig Erlam

Former 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.