The reporting period for companies is in active stage
The reporting period for companies is in active stage.
📈 It cannot be said that the dynamics of the reports are generally beneficial, but the most significant global corporations report, most of which are better than expected.
This is largely due to the fact that on the eve of the reports, forecasts were underestimated a little bit to please the markets.
There are, of course, exceptions. Some reports were not at all pleased, which generally does not change the global market direction.
Phase 1 between China and the United States has been successfully signed, the geopolitical disputes between the United States and Iran have temporarily calmed down. Markets are trading relatively calmly. The US stock market is on top, despite the divergence with production.
Technical analysis hints at the correction of some significant issuers. Next week is likely to give us multidirectional dynamics of stock markets.
Oil stopped after an intensive decline and is preparing for a reversal as part of the consolidation amid low volatility, gold is still moderately gaining in price, like other metals.
The ruble against the background of the resignation of the Russian government shows weakness, while the Russian stock markets rejoice after a statement by a potential prime minister who said he would create favorable conditions for business.
The upcoming trading week will delight you with a rich fundamental background and will begin on Tuesday, as the United States celebrates Martin Luther King Day on Monday. Other markets are unchanged.
Events worth paying attention to:
🇨🇳 The base lending rate of the National Bank of China. Easing policy and lowering the interest rate to strengthen domestic consumer demand is not ruled out, amid agreements with the United States, this will stimulate economic growth in the first quarter.
🇬🇧 UK employment data. Analysts make bold forecasts for a sharp increase in indicators. We expect more modest data, at the level of 45-65 thousand.
Change in the number of unemployment claims. Similar to forecasts, we expect a decrease in the indicator by 3-5 thousand compared to previous data.
At the same time, the unemployment rate is more likely to remain at the level of 3.8%, which is a very good indicator, with further prospects for reduction, due to an increase in the total number of jobs in the economy.
But the level of average wages may fall, again against the backdrop of the emergence of new jobs. As you know: if supply rises with not increasing demand, the price of each offer decreases.
Statistics on the level of the base retail sales index, as well as the volume of retail sales in annual and monthly comparison. There is every reason to believe that the statistics will be positive, which will give an upward impulse to the UK market.
Composite UK Business Activity Index. Decisive data. The indicator is closely approaching 50.0, which indicates the exit of manufacturing activity in the UK as a whole from the negative zone. We are waiting for indicators around 49.8, but no higher than 50.0.
Business activity in the service sector, while likely to overcome the mark of 50.0 (past parity data - 50.0).
The activity of the manufacturing sector is definitely not able to overcome a key milestone. As a result of this, the composite index also slightly does not reach the desired mark, but the dynamics, in general, are encouraging. It is possible that, against the backdrop of the news, the pound and the FTSE will receive support.
🇯🇵 Report of the Bank of Japan on the economic outlook and a decision on the % rate of the financial regulator. The rate is likely to be left at the level of -0.1%. Too much reduction is fraught with economic growth in this situation. This may contribute to the long-awaited correction on the Nikkei 225 index, as the market is overheated and the growth drivers have exhausted themselves.
🇨🇦 Publication of the inflation index. We do not expect dramatic changes. The level of 1.9% is likely to remain.
Decision on the % Rate of the Central Bank of Canada. The stock market still has room for improvement; by the way, it is currently one of the most attractive for investors and for the initial placement of companies, due to not so strict IPO requirements.
Big BoC press conference and publication of the Bank of Canada monetary policy report. We do not expect any changes beyond this event.
Canada's basic retail sales index. We expect positive dynamics at the level of 0.3% -0.5%.
Retail sales, which, similarly to the base index, should strengthen by about 0.5%.
🇺🇸 Sales in the US secondary housing market. This reporting promises to strengthen at least 50,000, possibly a more serious strengthening. We expect an increase of indicators.
Crude Oil Reserves from the Energy Information Agency (EIA). Over the past few months, the dynamics are very variable, but in the vast majority of publications, inventories are declining due to the support of the adopted agreement by OPEC countries. Currently, the situation with oil is somewhat ambiguous. Price levels are attractive enough for shopping. In the event of a decrease in reserves by at least 2 million barrels, oil is more likely to enter a phase of active improvement. If stocks increase, then there is no reason to expect too bright a decline, “black gold” is greatly oversold amid impulsive decline on the eve.
🇦🇺 Data on employment promise to grow, but not so much that it will likely strengthen the downward correction for the Australian dollar.
Unemployment rate. There is no reason to believe that under current conditions the number of non-working citizens will decrease, it may even slightly increase by 0.1%
🇪🇺 Eurozone deposit rate and decision on the interest rate of the ECB. The key rate is traditionally more likely to remain at zero. The ECB is doing everything to not have to reduce it, although quite conservatively, for this reason that the Central Bank is encouraging the population to invest through the introduction of a negative deposit rate. A statement will also be made on this topic, but below -0.5%, the rate will not go away in the coming week.
ECB classic press conference and ECB statement on monetary policy. A few "pigeon" messages are possible, but no drastic changes are expected. The strategy works, the economy is not overheated yet. Stock markets may start a correctional wave. If it develops long enough, then radical actions of the ECB are possible. While everything is going according to plan, well, or almost according to plan.
The eurozone will report on the index of business activity in the manufacturing sector. Data is below the level of 50.0, which causes attention and strengthens the corrective downward movement in European stocks.
The index of business activity in the service sector will come out above 50.0 and indicate the sustainability of the sector. Production for stock markets is a more significant indicator.
🇩🇪 ZEW economic sentiment index. In December, the index finally entered the positive zone.
Eurozone business activity indices will directly depend on data on business activity in the manufacturing and services sectors in Germany. As the leading EU economy, it is Germany that sets the general mood.
Services show positive dynamics that are improving over time, while production data is slightly behind. Based on this, the further growth of European stock markets is deprived of "fuel".
The business climate index in Germany, according to 7,000 of the most significant companies for GDP. Statistics show a general downtrend of sentiment. In the current economic environment, companies are generally skeptical.
It will be possible to break the trend if the value is above 100.00. The upcoming publication, according to our forecasts, if it demonstrates growth, it will not exceed 96.00, which is likely to be insufficient for the development of beneficial dynamics in European markets.
🇳🇿 New Zealand Consumer Price Index. World analytic departments predict a decrease in inflation in New Zealand on a quarterly basis to 0.4%, while compared with the same period a year earlier, an increase of 0.3% is expected. (from 1.5% to 1.8%) In aggregate, such a pattern would likely leave the New Zealand dollar under pressure rather than give it support. The growth of quotes at the time of publication of the news may allow you to sell at a better price.
Basically, in the upcoming trading week, all attention will be focused on the UK. The overall dynamics is expected to be upward.