These Five Upcoming News Events Will Show the Next Market Move

Nigel Frith
Stock Market Candles in front of a Clock and Smart Tablet

After a barnstorming start to the week, financial markets have given up some ground. The sell-off in the SPX500 (S&P500) index began just before the US exchanges opened on Tuesday and continued through the Asian session. The SPX500 and US30 (Dow Jones Industrial Average) have now given up approximately 1% of their value from Tuesday’s highs and are down on the week.

SPX500 – 1H price chart

SP500 chart shows stability after high price

Source: Tickmill

 

US30 – 1H price chart

US30 index chart shows stable price after a high price point

Source: Tickmill

An interesting divergence is that the FTSE100 is still in positive territory. The index has a more substantial weighting towards banks and oil stocks that have found support from the crude oil price, talk of inflation and higher interest rates.

UK100 – 1H price chart

UK100 price chart shows a steady price rise, before stabilising

Source: Tickmill

The Dip-buyers Dilemma

Is this price consolidation a chance to buy the dip while price trades below the 50 SMAs or a sign that nagging concerns are still clouding the big institutional investors’ decision-making?

The absence of any dramatic announcements relating to pandemic stimulus measures appears to have given analysts the chance to consider some of the potential downsides. Any recovery looks likely to involve some degree of mass unemployment, even if it is frictional as people rotate out of jobs which no longer exist.

Inflation Concerns are Hanging Over the Markets

Inflation appears to be the new buzz-word and is the metric increasingly likely to determine in which direction prices will head.

The yield on the benchmark US 10-year Treasury note fell to 1.287% at the open of European markets on Wednesday. Simultaneously, the longer-dated US 30-year T-bond saw its yield slide to as low as 2.059%.

The fall in yields and the rise in prices are low-key but significant events; fixed income desks take the long-view. Their decisions can set the mood music which more short-term speculators will dance to.

The Five News Events to Watch Out for on Wednesday

The data releases out on Wednesday which triggered the slide indicate that Treasury yields will be worth keeping an eye on. The below numbers are likely to fill in some of the gaps.

  • US retail sales for January – is due out at 8:30 am Eastern Time.
  • Industrial production numbers for January – due to be published at 9:15 am. ET.
  • December business inventories – released at 10 am ET.
  • The National Association of Home Builders release February numbers relating to the housing market index at 10 am ET.
  • Minutes from the US Central Bank’s Federal Open Market Committee’s last meeting will be released at 2.00 pm ET.

Any suggestion that inflationary pressure is building will muddy the waters. Central banks may express a readiness to increase base level interest rates to control the price rises.

The alternative scenario is that “a little bit of inflation” might not be seen as a bad thing. It would undoubtedly erode the wartime levels of debt that governments have taken on to deal with the Covid-19 pandemic.

Inflation might be bad news for bond-holders; however, risk-on asset groups such as equities could see price rises as investors take positions to hedge against the risk of their cash pile wasting away.

 

If you want to know more about this topic, or have been scammed by a fraudulent broker, please contact us at [email protected]

 


Nigel Frith

Latest news

Forex vs Crypto: What’s Better For Beginner Traders?
The crypto and forex markets are two of the world’s most popular among investors and traders. Read more
Three Great Technical Analysis Tools for Forex Trading
You don’t have to be very technical minded to make use of technical analysis in your forex trading. Read more

Safest Forex Brokers 2024

Broker Info Best In Customer Satisfaction Score
#1 73% of retail CFD accounts lose money. Founded: 2014 Global Forex & CFD Broker
Number One Broker
Best Trading Conditions Visit broker
4.9
#2 Blackbull LogoYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker
4.8
#3 AvaTrade LogoYour capital is at risk Founded: 2006 Globally regulated broker
Number One Broker
BEST CUSTOMER SUPPORT Visit broker
4.9
#4 plus500 logo 80 april 2024* 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money Founded: 2008 Global CFD Provider
Number One Broker
Best Trading App Visit broker
5
#5 Between 74-89 % of retail investor accounts lose money when trading CFDs Founded: 2010 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
4.9
#6 Forex Broker eToro Logo76% of CFD traders lose money Founded: 2007 Global CFD & FX Broker
Number One Broker
ALL-INCLUSIVE TRADING PLATFORM Visit broker
4.9
#7 XM LogoYour capital is at risk Founded: 2009, 2015 and 2017 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
5
#8 FxPro LogoYour capital is at risk Founded: 2006 CFD and Cryptocurrency Broker
Number One Broker
CFD and Cryptocurrency Visit broker

    Forex Fraud Certified Brokers

    AvaTrade logo
    eToro Logo
    BlackBull Logo Small
    XM Logo
    FXTM Logo
    FxPro logo
    plus500 logo 80 april 2024
    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.