5 Issues to Look Out for This Week - 26/4/21

5 Issues to Look Out for This Week – 26/4/21

By Mateo Jarrin Cuvi

Let’s wrap up April in style!

US and EU GDP, inflation and interest rates, retail sales and earnings reports for oil and gas, construction and banking giants are on the table this week.

Will Q1 US GDP Meet the Lofty Expectations?

Strong retail sales (9.8% growth) and the addition of close to one million jobs in March bodes well for Q1 GDP in the US.

The Atlanta Federal Reserve, which tracks data in real time to predict GDP numbers, expects Q1 GDP to hit an impressive 10%.

Furthermore, Morgan Stanley believes US GDP on a fourth-quarter-by-fourth-quarter basis for 2021 will hit 8.1%.

Even more so, back in late February, New York Federal Reserve President John Williams said, “With strong federal fiscal support and continued progress on vaccination, GDP growth this year could be the strongest we’ve seen in decades.”

It seems obvious that a combination of the reopening of the US economy, a strengthening job market, Biden’s stimulus packages, and the efficient and speedy vaccination rollout has paid its dividends and the country should be back to its pre-pandemic levels of growth sooner rather than later.

Will these expectations be confirmed or surpassed on Tuesday, April 27th at 13:30 BST when the country’s latest GDP results are released?

Only one way to find out, so tune in and prepare your USD trades!



When The Fed Speaks, You Listen

Is the US economy overheating and will inflation shoot up?

The Fed doesn’t seem to think so.

During a recent online interview with The Economic Club of Washington D.C., Federal Reserve Chair Jerome Powell said that there are no plans at this time to increase interest rates and reduce the amount of money being injected into the economy.

Powell did set the required conditions for the government to jack up interest rates and drop its current level of quantitative easing.

These include that the labor market returns to its normal levels of employment and inflation hits 2%, showing that it will remain there for the foreseeable future.

Find out for sure whether low interest rates and current levels of quantitative easing will remain untouched when the FOMC speaks on Wednesday, April 28th between 19:00 and 20:00 BST.

It’s a good idea to always pay close attention to what The Fed says as it might reveal some interesting USD trading opportunities!

EU GDP on the Mend while CPI Slumbers

On Friday, April 30th we have EU CPI and GDP results to inspire your trades!

Inflation for the economic bloc is expected to remain stable at about 1.3%. Yawn.

But what about GDP? Will Europe’s economy start growing following a Q4 2020 in the red?

As reported by Reuters, Euro’s GDP for Q4 2020 “fell by 0.7% quarter-on-quarter, for a 5.1% year-on-year decline” following a resurgence of COVID-19 cases and the many lockdowns introduced across the region.

Despite this downturn, analysts believe the EU’s GDP will recover in 2021 as vaccinations speed up throughout the region.

In its recent Regional Economic Outlook Update for Europe, the IMF expects the region’s GDP to bounce back and hit 4.5% in 2021, revised from the 4.7% mark predicted in October 2020, now factoring in the current toll the pandemic is having on local economies.

The European Commission is a touch more conservative when forecasting EU GDP moving forward.

In its latest winter economic forecast, the EU suggests the region’s economy will expand by 3.7% in 2021, a slight downturn from the numbers it released during the fall.

Review the latest GDP and CPI data at 10:00 am BST and get trading EUR!



Shopping Therapy Taking a Hit in Canada

December and January were poor months for retail sales in Canada. Thanks a lot COVID.

Retail sales during these winter months contracted by 4.1 and 1.2%, respectively, and more of the same if expected for February with analysts suggesting these will drop by 2.6%.

As explained by Statistic Canada, the reintroduction of physical distancing measures amidst a new wave of COVID-19 infections hindered the country’s retail sector with “approximately 14% of retailers [staying] closed at some point in January for an average of three business days.”

Will things turn for the best in February or will numbers remain in the red?

Find out on Wednesday, April 28th at 13:30 BST what retail sales looked like for February and roll out your CAD trades.

Construction, Banking and Oil & Gas Up Next!

Plenty of earnings report action this week!

Here’s what to keep an eye out for starting on Thursday, April 29th.

Who: Caterpillar (.CAT.N)
Day: Thursday, April 29th
Time: 11:30 am BST
Note: Did you know Caterpillar routinely beats market expectations? For the past two quarters, for example, the construction and mining giant boasts an average surprise of 30.86%. Food for thought, no? Expected earnings per share for Q1 2021 (EPS) is $1.93.

Who: Mastercard (.MA.N)
Day: Thursday, April 29th
Time: 1:00 pm BST
Note: During Q1 2021, Mastercard announced it would start allowing customers to transact using a few select cryptocurrencies as part of its overarching plan to expand its mobile and digital payment options. EPS is expected to be $1.66.

Who: Chevron (.CVX.N)
Day: Friday, April 30th
Time: 12:30 pm BST
Note: As oil prices pick up following what was a catastrophic 2020, the shares of this oil and gas giant have gained strength over the first few months of 2021. Analysts believe the EPS will be $0.92.

Who: Exxon Mobil (.XOM.N)
Day: Friday, April 30th
Time: 12:30 pm BST
Note: Exxon Mobil could see its first profit in over a year during Q1 2021 thanks to stronger results across the board. Factor into this higher oil and gas prices, which will provide a boost of as much as $2.7 billion, and you have a winning prognosis to kick off 2021. EPS is expected to be $0.59.

Tune in to each earnings report and set your trades based on their results!

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*Any opinions, news, research, analyses, prices or other information contained here are provided as general market commentary and do not constitute investment advice. FXPRIMUS does not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.

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