A record end to the week

Optimism builds into the weekend

Stock markets are ending the week on a positive note, with earnings continuing to surprise to the upside and Covid fears being brushed aside as the S&P and Nasdaq hit fresh record highs.

Whether both of these things will continue, we’ll see in the coming weeks, but for now investors are extremely enthused by what they’ve seen and optimistic about what’s to come.

Central banks continue to play their part, with the ECB on Thursday reaffirming its commitment to ultra loose monetary policy, driven largely by its inability to get inflation even close to target, beyond the transitory price pressures we’re currently seeing.

Next week it’s the Fed’s turn and that will be far more interesting, with it being a central bank that actually has recent experience of tightening monetary policy. The strong second quarter we’re currently seeing from corporate America will make taper discussions all the more interesting.

Brighter outlook for bitcoin

Cryptocurrencies were given a helping hand by their old friend Elon Musk this week and it couldn’t have come at a better time.

Just as bitcoin was pushing below $30,000 – a level which if significantly broken could have sent the price tumbling back towards $20,000 – Elon rode to the rescue.

His declaration that Tesla could u-turn on its u-turn and start accepting bitcoin again in the future, combined with his disclosing of personal holdings of bitcoin, ethereum and dogecoin, was enough to send prices soaring again. Now back above $32,000, the near-term outlook is looking a little brighter for cryptos.

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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.