Forex Market Analysis

More Results to Come, More Growth for the Markets

Weekly Macroeconomic Outlook (30th July – 3th August)

Last week was a really positive week for the markets.

  • Firstly, because of the Junker – Trump meeting
  • Strong quarterly results and macroeconomics inidcators
    • Mostly the American GDP which reached the 4.1% growth
  • Also, there was the ECB meeting where it was confirmed what it was previously stated in the previous meeting
    • No modifications
      • However, it gave a soft message and reiterated the importance of an accommodative monetary policy

This week, probably we’ll have again a positive tone in the markets.

  • As trade wars concerns have reduced
  • Furthermore it is a really intense week in terms of:
    • Quarterly results
    • Macroeconomic Indicators
    • Central Banks Meetings
  • Regarding corporate results, there are still a lot of companies left to publish
    • Apple, Tesla, BNP Paribas…
    • So far, in United States, 245 companies have already published
      • The average growth in EPS has been around 23% and 86% of the companies have break expectations
    • Moving to Central Banks, this week is going to be really intense too
      • 1st reference will be the FED with no modifications expected
        • Around mid-July Powell stated that two more rises in interest rates are expected in September and December in 2018 and three more in 2019
      • 2nd reference is the RBI (Reserve Bank of India) which, in this case, could really rise interest rates to 6.5%
        • It would be the second rise this year
      • 3rd reference is the BOE which is forecasted to rise the interest rates to 0.75%
        • Important to bear in mind that inflation has peaked to 2.4% and labour costs have also increased
      • 4rd reference is the Central Bank of Japan which is expected to continue with the same monetary policy however it can give a  harder message in terms of future expectations
    • Finally, it is also a very intense week in macroeconomic indicators
      • Forecasted results are rather positive

Wrapping all these factors up, it is expected a bullish week in the markets, especially indexes. Markets look good after a reduction in concerns on trade wars and protectionism plus solid quarterly results and macroeconomic indicators.




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