June 5, 2021 | by sandeep
5 Market Movers to Look Out for This Week – 7/6/21
By Mateo Jarrin Cuvi
You know the drill, trader. Mark these on your busy agenda and get ready for some market moving action!
Will Canada Move First?
Is Canada in line to be the first major economy to hike its interest rates from its current historic lows?
Back in April, the Bank of Canada (BOC) announced it would cut its purchases of government debt and speed up plans to increase its interest rates.
As reported by Bloomberg, Governor Tiff Macklem and his team of experts specifically decided to “scale back their purchases of government debt by a quarter to C$3 billion ($2.4 billion) and accelerate the timetable for a possible interest-rate increase.”
However, the government did say it wouldn’t “raise its benchmark interest rate, currently at 0.25%, until the [economic] recovery is complete and inflation is sustainably at 2%.”
Will this decision be confirmed on Wednesday, June 9th at 2 pm GMT when the BOC issues its latest Interest Rate and Monetary Policy Statement?
Keep your ears open to what is said as the overall sentiment of the announcement with its specific words and phrases may have a profound impact on the price of CAD.
So prepare those CAD trades as the currency is bound to move!
The Words EU’se Matter
During its last announcement, the European Central Bank (ECB) did not even discuss a cut in PEPP purchases and its comments on the region’s interest rates left a lot to be desired.
However, a little bit more activity is expected when the ECB releases its latest Interest Rate and Monetary Policy Statement on Thursday, June 10th at 11:45 am GMT.
According to ING, Thursday’s session “could be packed with insightful information but probably not with tangible action.”
For instance, DailyFX’s Christopher Vecchio thinks the ECB won’t “act quickly to address what it has called transitory inflation,” particularly “if higher inflation leads to higher yields.”
Still, pay close attention to the language used and track everything that’s said pertaining to the ECB’s concerns over rising inflation, tapering (or avoiding it altogether), GDP projections, and the EU’s overall financial conditions.
And stay prepared to line up your EUR trades!
Hot, Hot Heat!
US CPI for April surprised everyone, registering a growth of 4.2% from April 2020, its highest spike since 2008, and far exceeding the 3.6% predicted by the experts.
Many are now concerned the US economy is overheating and inflation will continue its push north.
Still, the Fed firmly believes this inflationary pressure is only transitory and will settle at its desired rate of 2% some time later this year.
Adding to this, the Fed has reiterated that it will not jack up interest rates or start tapering until the job market is fully recovered and inflation has been running at 2% or more for a prolonged period of time.
With all of this in mind, let’s find out where CPI is headed when the US releases its figures for May on Thursday, June 10th at 12:30 pm GMT.
You know what else you can do!
Have a Seat on the Cryptocoaster
Bitcoin has been on a rollercoaster of a ride during the past few weeks, losing close to 42% of its all-time-high value.
The market for Bitcoin seems to be bearish with China clamping down on crypto mining and Elon Musk…well…just being Elon Musk.
Will Bitcoin begin its recovery this week or are things not looking so dandy for the world’s favorite cryptocurrency?
Data continues to signal a bearish market for cryptocurrency with Bitcoin, as of Friday, June 4th, still below its 200-day moving average.
But, like with everything in the crypto world, this could change with the flip of a [insert the crypto coin of your choice].
Stay glued to your screen for news on BTC and trade to make the most of the usual volatility!
Live in the Momentum?
Despite sliding by 1.5% in May as a result of inflationary concerns, NASDAQ is once again picking up momentum in what seems to be a somewhat bullish market, bolstered by weaker than expected jobs data last Friday.
The US Fed’s reassurances that inflationary pressure will slow down during the second half of 2021 has contributed to gains for tech stocks and indices such as NASDAQ.
The pace of growth has stalled to a certain extent, though, with a new ‘lower high’ being established just shy of 14,000 with resistance and support levels at 14,000 and 13,400, respectively.
According to Daily FX’s Margaret Yang, prices are consolidating with the MACD “about to form a bearish crossover, suggesting that upward momentum is fading.”
Nevertheless, the lacklustre gains made by the labor market in May with NFP falling short of expectations by about 100 thousand jobs should provide a boost to the equity market.
In a world where, according to Daily FX’s Peter Hanks, “ bad news is good for stock prices because investors will expect the Fed to remain accommodative for longer,” these average NFP results should offer a boost of sorts to NASDAQ.
It will also be interesting to see the results of Thursday, June 10th’s CPI announcement as this might shed more light on the state of the economy and the plans the Fed might have on interest rates and tapering, which could in turn apply downward pressure on NASDAQ.
The Fed, however, is currently in a blackout period until June the 17th, ahead of the periodic Fed meeting.
All in all, pay close attention to the stock market and its related indices as this might be a good week to open some positions!
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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.