April 26 – A look at the day ahead from Danilo Masoni.
There will be plenty to chew on this week, with the Fed meeting featuring as main attraction alongside top-tier macro data and earnings reports from almost 300 U.S. and European firms.
While Canada’s hawkish surprise last week has put markets on high alert for signs the U.S. central bank might be considering tapering of bond purchases, most reckon it will stick for now with its ultra-easy policy stance.
That will be crucial for market sentiment which is torn between buoyant macro data and company results in much of the developed world and the explosion in COVID-19 cases across India and the rest of Asia.
So while the dollar has slipped to an eight-week low, equity investors seem content to stay on the sidelines with both European and U.S. futures trading around flat. Both indexes fell last week, snapping a multi-week winning streak.
Eyes today are on Germany’s IFO survey which comes on the heels of robust manufacturing figures; later this week, expect Q1 GDP releases in the euro zone, Germany and the United States.
Bond yields are inching higher meanwhile; German Bunds may feel the heat from opinion polls showing the Greens overtaking Merkel’s conservative bloc before September elections.
On the corporate radar, the main event is Telsa’s earnings report with expectations of a 72 increase in revenue.
In Europe, Philips shares could rise 2% after a hefty jump in quarterly profits, while steelmaker SSAB’s Q1 profit beat means it could open 1% to 5% higher. On the M&A front, Nestle is in talks to buy nutritional supplement maker The Bountiful Company.
Key developments that should provide more direction to markets on Monday:
* BIS, BOE and ECB conference on the post-pandemic spillover; CB’s Fabio Panetta to speak
* German IFO
* Kazakhstan central bank meeting
* U.S. durable goods
* U.S. 2 year and 5 year note auctions
* U.S. earnings: Tesla
* European earnings: Galp, Philips, Kuhne and Nagel
Reporting by Danilo Masoni
