5 Market Movers to Look Out for This Week – 12/7/21

5 Market Movers to Look Out for This Week – 12/7/21

By Mateo Jarrin Cuvi

Make a Statement, New Zealand and Canada!

We’ve got cryptocurrencies headlining this week’s market movers, plus lots more!


Crypto’s Back!

Following a short break, your favorite cryptocurrencies have made a comeback and are now ready for you to trade!

Since its crash in mid-May, when Bitcoin lost pretty much half its value, things have stabilized and consolidated in cryptoworld.

These days, Bitcoin has been hovering around the $33,000 mark, while Ethereum sits close to $2,100.

Galaxy Digital CEO Mike Novogratz told CNBC’s Squawk Box last week that Bitcoin is consolidating between the $30,000 and $35,000 range and “what we’re seeing is Asia sells it off, and then the U.S. buys it back.”

Pankaj Balani, CEO and founder of Delta Exchange, is a bit more optimistic and expects Bitcoin to push up from $30,000 to the low $40,000s.

“We expect it to spend the next few weeks testing this range on either side,” he said. “Though we have seen an upward bias in the last few days it will take some work for BTC to break above the $42,000 mark.”

Others, however, expect Bitcoin to drop to $25,000 before more institutional and heavy-hitting investors re-enter the fray and start purchasing cryptos in massive quantities.

What you can definitely expect is plenty of price movement, so make sure to trade Bitcoin, Ethereum, Bitcoin Cash and Litecoin this week and make the most of one of the world’s most volatile markets.


Ready to Blow Things Up?

Last month, US inflation climbed to 5%, its highest level since 2008.

Core inflation, which omits volatile items such as food and energy, reached 3.8%, a mark last seen in the early 1990s.

Overall, as explained by the Guardian, “fears over rising prices in the US have gripped markets, with investors fearing that pent-up demand and supply chain bottlenecks would create inflationary pressures, forcing central bankers at the Federal Reserve to slow their stimulus programme.”

However, Kaia-Reet Parv, Head of Investment Research here at FXPRIMUS, believes we should take current inflationary pressure with a grain of salt.

She says: “The Fed may change course and postpone tapering as inflation expectations and economic expansion have largely peaked. The baseline effects are gradually receding and the bottlenecks in the supply chains are clearing with consumers having largely exhausted their stimulus checks. This, in turn, has forced the volatility in the economic data back to within its historic range.”

Given last month’s gaudy numbers, what’s to be expected for June?

Find out on Tuesday, July 13 at 12:30 pm GMT when the US releases its latest CPI data and make sure to have those trades ready to go.


Make a Statement, New Zealand and Canada!

Central Banks in those major economies currently experiencing a faster pace of economic recovery have already taken some preliminary steps to scale down their emergency stimulus.

For instance, both New Zealand’s RBNZ and Canada’s BOC are a step ahead of the US’s Fed.

The BOC has started scaling back asset purchases, while New Zealand’s RBNZ will probably move aggressively closer towards tapering and raising its interest rates during its monetary policy statement this week, considering that the island’s economy has rebounded strongly from a poor 2020 and inflation is starting to rear its ugly head.

These moves mark a clear divergence with the EU’s ECB and the UK’s BOE position vis-a-vis quantitative easing. Both of these economies are still in a precarious situation and their central banks are not even willing to discuss the scaling back of asset purchases.

With this in mind, tune in on Wednesday, July 14 as both the RBNZ and BOC deliver their latest Interest Rate and Monetary Policy Statements.

Who: Reserve Bank of New Zealand (RBNZ)
Day: Wednesday, July 14th
Time: 2:00 am GMT
Instrument: NZD
Note: ASB and ANZ, both banks in New Zealand, expect RBNZ to hike interest rates as early as November of this year considering the robust inflation and demand numbers recently published in the NZIER’s Quarterly Survey of Business Opinion.

Who: Bank of Canada (BOC)
Day: Wednesday, July 14th
Time: 2:00 pm GMT
Instrument: CAD
Note: BOC has kept its benchmark interest rate at close to 0% and it is not expected to shift until the second half of 2022. The BOC did however start tapering back in April, dropping its weekly purchases in government bonds from C$4 to about C$2.4 billion.


Retail Therapy on the Wane?

Retail sales in May slowed down compared to previous months.

Still, they remained 28% higher than the numbers recorded a year ago at the outset of the COVID-19 pandemic.

As reported by Business Insider, this improvement was spurred by a couple of sectors: “Spending in the clothing and accessories industry was up 200% year-over-year, while sales at food services and bars sat 71% higher from the year-ago period.”

With people settling into their new routines and the stimulus checks drying up, retail sales for June are expected to take another hit, which should move the USD.

On the positive side, demand’s slowdown could help quell fears of runaway inflation as prices stabilize and stop their upward movement.

Find out on Friday, July 16 at 12:30 pm GMT whether Americans stopped shopping till dropping and prepare those USD trades.


Time to Count Some Money!

Q2’s earnings reports are here and we start this week with the world’s preeminent investment banks.

Analysts suggest it will be very difficult for the banking world to match the jaw-dropping results seen for Q1.

For instance, Trefis, a US company that collates and analyzes financial data, “[expects] JPMorgan to edge past the consensus estimates for revenues, while the earnings will likely remain below the expected figure” with “the lower interest rate environment [continuing] to hurt the net interest income.”

Additionally, last month at the Morgan Stanley US Financials Conference, Morgan Stanley’s CEO James P. Gorman said “[investment banking] revenues are not going anywhere near the “gangbusters” level as recorded in first-quarter 2021,” yet they “are expected to be still better than what it was in the pre-pandemic times.”

Moving forward, prospects remain a bit unclear for the banking sector considering the resurgence of COVID-19 via the Delta variant and the Fed’s uncertainty vis-a-vis its tapering plans.

Here’s what’s lined up for you, including the expected earnings per share (EPS) for each:

Who: JP Morgan Chase (.JPM.N)
Day: Tuesday, July 13th
Time: 10:50 am GMT
EPS: $3.09

Who: Goldman Sachs (.GS.N)
Day: Tuesday, July 13th
Time: 11:30 am GMT
EPS: $9.46

Who: Bank of America (.BAC.N)
Day: Wednesday, July 14th
Time: 10:00 am GMT
EPS: $0.77

Who: Citigroup (.C.N)
Day: Wednesday, July 14th
Time: 12:00 pm GMT
EPS: $2.03

Who: Wells Fargo (.WFC.N)
Day: Wednesday, July 14th
Time: 12:00 pm GMT
EPS: $0.93

Who: Morgan Stanley (.MS.N)
Day: Thursday, July 15th
Time: 11:30 am GMT
EPS: $1.64

Plenty of equity action for you to trade Tuesday through Thursday!

To check out a list of all of our ongoing promotions and offers, have a look at our website here.

*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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