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Issues to Look Out for This Week - 3/5/21

5 Issues to Look Out for This Week – 3/5/21

By Mateo Jarrin Cuvi

PMI, retail sales, Bank of England statement, employment figures, earnings reports. What else do you really need to start trading this week?

US Manufacturing’s Firing on All Cylinders

Manufacturing in the US really picked up its pace in March, with the Institute for Supply Management’s (ISM) PMI hitting its highest level since December 1983 and exceeding expectations by more than 3.5%.

A combination of President Biden’s $1.9 trillion pandemic relief package and the reopening of the economy thanks to a successful vaccination campaign has spurred growth in most sectors.

According to Reuters, families in the US have also accrued close to $20 trillion in savings during the current crisis, something that should further boost the US economy and drive demand
moving forward.

Despite this shiny prognosis, ISM’s Timothy R. Fiore, CPSM, C.P.M., Chair of the Business Survey Committee remarks that companies are still having trouble “[meeting] increasing rates of demand due to coronavirus (COVID-19) impacts limiting availability of parts and materials,” with “extended lead times, wide-scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products” taking its toll on businesses.

With this in mind, will April’s PMI results show more of the same? Or is a slowdown in store for the US economy?

Find out on Monday, May 3rd at 2:00 pm GMT when ISM reveals its latest figures. And don’t forget to line up your USD trades.

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Oil & Gas, Gold, Pharma on the Menu

Earnings reports season continues this week with plenty of action in the oil and gas, mining and pharmaceutical sectors.

Let’s see who’s got next!

Who: ConocoPhillips (.COP.N)
Day: Tuesday, May 4th
Time: 11 am GMT
Note: Increased production to between 1470 and 1490 barrels per day and higher oil and gas prices should drive an overall jump in profit levels for ConocoPhillips. EPS is expected to be $0.58.

Who: Kirkland Lake Gold (.KL.OQ)
Day: Thursday, May 6th
Time: 10 am GMT
Note: Gold production for Q1 2021 for Kirkland Lake Gold amounted to 302,847 ounces, which has exceeded the first quarter’s expectation of between 270,000 and 290,000 ounces. These numbers are still significantly lower than those for Q1 2020 and the previous quarter. EPS should be close to $0.67.

Who: Moderna (.MRNA.OQ)
Day: Thursday, May 6th
Time: 11 am GMT
Note: IModerna’s stock hit a high of $186 in February to then lose more than 50 points by the end of Q1. Still, the pharma company’s COVID-19 vaccine has been a great success story. Plus, a recent announcement that booster and annual shots of the vaccine might be required to ward off the virus bodes well for the company’s future earnings. EPS is $2.36.

Jot down these events on your calendar and get ready to trade these companies’ equities!

Is Europe on a Shopping Roller Coaster?

Retail Sales in the EU for February were a whole lot better than expected, growing by 3% or almost 1.5 points higher than anticipated.

This rebound was spearheaded by a 6.8% increase in non-food sales and an impressive 37% growth in auto fuel sales.

February numbers were also supported by the partial reopening of several EU economies. Austria experienced a 28% increase in retail sales, whereas both Slovenia and Italy saw their figures rise by 16.4 and 8.4%, respectively.

Despite this improvement, however, the latest surge in COVID-19 cases in the region doesn’t necessarily bode well for retail sales in March and the start of Q2 2021.

According to Claus Vistesen, Chief Eurozone Economist at Pantheon Macroeconomics in the UK, “This is a decent headline, though it doesn’t do much to alter the overall poor outlook for sales hrough Q1 as a whole.”

“In addition, any strength at the end of Q1 will come at the expense of weakness at the start of Q2 as new restrictions are implemented to hold back the virus,” Vistesen concluded in a statement for Sharecast.

Check out the latest numbers for EU retail sales on Thursday, May 6th at 9:00 am GMT and roll out those EUR trades.

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This is London Calling; You Better Pay Attention

The Bank of England (BOE) is predicting that the UK’s economy will contract for Q1 2021. This follows the economy’s largest annual contraction in more than three centuries in 2020.

Despite this poor albeit unintended performance, analysts believe the UK economy is set to rebound very quickly thanks to its vaccination drive, robust governmental support and local businesses’ adaptability amidst the raging global pandemic.

Experts now predict that the UK’s growth in 2021 will be 5.4%, upgraded from the 4.2% figure tossed around in February.

According to the Financial Times, “the consensus rate of output growth would be the fastest pace since 1989” with “any expansion above 6.5 per cent [being] the strongest since the second world war.”

In light of this new forecast, will the BOE keep the key interest rate at 0.1% now that dropping it into negative territory is off the table?

And will the total bond-purchase target remain at 895 billion pounds

Pay close attention to the BOE’s Monetary Policy and Interest Rate decision on Thursday, May 6th at 11 am GMT to find out what’s ultimately decided and prepare those GBP trades

NFP = Our Favorite Friday to Trade USD!

The US labor market is on the move, adding an impressive 900 thousand jobs in March. This also marks the largest number of jobs created in the first two months of any US presidency.Ever.

In March, most jobs came from the leisure and hospitality sector, which added 280 thousand jobs primarily in restaurants and bars.

Furthermore, construction jobs surged by 110 thousand, the manufacturing industry saw 53 thousand positions open up, and mining experienced its largest employment gain in close to 40 years.

Despite employment remaining 8.4 millions jobs below figures seen a year ago, experts believe the US economy will be adding roughly 700 thousand jobs per month in Q2 and Q3.

Will this amazing recovery continue on Friday, May 7th when the latest NFP data for April is released at 12:30 pm GMT?

There’s only one way to find out!

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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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