3 markets to watch next week

4:44 PM October 23, 2020

The daily number of new coronavirus cases in most European countries exceeds the levels recorded in the first half of the year. This situation puts pressure on the ECB to decide on new measures to stimulate the economy - the next meeting will be held on Thursday. In the meantime, the US is set to show a record GDP rebound in Q3 after a record decline in the second quarter of this year.


EURUSD is likely to be more volatile during the publication of US GDP data for Q3. The data will be released on Thursday at 1.30pm BST. The pair will experience more volatility on this day due to the ECB's interest rate decision, which will be released at 13:45 BST. In the case of the first event, an annualized rebound of 32% q / q is expected. On the other hand, in the case of the ECB, no change in rates is expected, but at the same time the markets hope to receive information regarding additional stimulus as the escalating pandemic threatens region's economic recovery. EURUSD reached its one-month high this week amid the weakening of the US dollar.


The tech-heavy index will be once again one of the key markets next week, mainly due to corporate results. Next week belongs to technology giants - Microsoft (Tuesday), Apple (Thursday) and Amazon (Thursday). Investors will also pay attention to biotechnology companies, most notably Gilead, whose drug Remdesivir has supported Donald Trump's treatment and has been approved by the US governmental drug agency (FDA) as an official drug to help treat coronavirus. In addition, Facebook, Twitter and Google executives will testify in front of the Senate on Wednesday. The hearings will be about "hate speech" and the disinformation spread on these platforms. The US100 stopped its declines near the support at 11,650 pts.


The earning season continues in Europe as well. Next week, 10 DAX companies will report their results, including Deutsche Bank on Wednesday, Volkswagen and BASF on Thursday. Recurring restrictions will be another important factor for European companies. Governments are aware that the second wave of the pandemic is spinning out of control and are urging people to stay at home and restricting the activities of companies that provide secondary services. The DE30 received support this week thanks to solid PMI readings. On the other hand, German index is still trading 6% below the “post-pandemic” highs.


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