The aggressive pace in bullish momentum since global equities bottomed last month notably cooled this past week. In the United States, as virus case growth continued slowing, the Dow Jones[1] and S&P 500[2] ended the previous 5 sessions cautiously lower. Yet losses were notably trimmed as Friday wrapped up and the US government passed a $484 billion interim stimulus package.
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All things considered, it was a relatively quiet week for FX despite crude oil prices[3] at one point turning negative for the first time on record. As the commodity stabilized, so too did the Canadian Dollar[4]. The sentiment-linked Australian Dollar[5] was a notable outperformer while the haven-oriented US Dollar[6] ended only marginally higher on average.
Earnings may continue being the focus for financial markets in the week ahead as central banks and key economic data accompany. Financial businesses have been a notable underperformer while information technology and consumer discretionary ones have been showing some levels of resilience. Earnings from Amazon, Apple, Alphabet, Visa, Caterpillar and more are due.
With most major central banks sitting at zero rates as quantitative easing runs in the background, traders will likely focus on their economic assessments. Those up ahead are the Bank of Japan, European Central Bank and the Federal Reserve. First-quarter US GDP is anticipated to shrink, but by how much? Markets seem to be looking forward to a reopening with each passing week.
Fundamental Forecasts:
Euro Forecast: Outlook for EUR/USD Still Bearish[7]
The prospect of a severe contraction in the Eurozone economy, combined with the region’s slow and complex decision-making process, will likely lead to further losses for EUR/USD[8]
