European open – Calm before the storm

Another huge week ahead

The week is off to a mixed start which isn’t wholly surprising given just how much investors have to follow in what is typically a peaceful time of year.

Source – Thomson Reuters Eikon

There’s no summer lulls just yet, with the Fed about to embark on an easing cycle, the BoE offering its first assessment since Boris Johnson became PM, a third of S&P 500 and a quarter of Dow companies reporting second quarter earnings, the US jobs report being released and trade talks restarting between the US and China. As ever, this is almost entirely spread over four days so today may be the calm before the storm.

It’s tough to pick the headline act among all of these, more often that not we’d be looking at the jobs report but that’s fallen well down the pecking order this time around. It’s hard to look past Wednesday’s Fed decision because although a rate cut is entirely priced in, market expectations are high over the coming months which means Powell will have a job keeping up.

The market rally is so heavily reliant on central banks promising more accommodation that Powell will have to be very careful not to disappoint too much or it could be a very long summer. Earnings season may be going well thanks to a very low bar but we’re almost half way into the season and still heading for an earnings recession, so we can’t look here for support.

Economic Calendar

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

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Former Craig

Former Craig

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.