Three markets to watch next week (09.04.2021)

5:03 PM April 9, 2021

US earnings season for Q1 2021 begins next week and corporate reports tend to be important drivers for equities. Have vaccines and new stimulus checks boosted US companies, or was this offset by a recent deterioration in pandemic situation? We shall get updates from major US banks next week. Apart from that, gold and GBP will be on watch next week.


First quarter of 2021 has ended and it is time for the US companies to start reporting quarterly results. As usual, major US banks will be one of the first to report. Wells Fargo, JPMorgan and Goldman Sachs will publish Q1 results on Wednesday, followed by Citigroup and BlackRock on Thursday. Report from Morgan Stanley on Friday will wrap up banking releases next week. S&P 500 sits near record highs and Q1 results could be the next major driver for the index.


Gold and silver have been underperforming this year amid a pick-up in US yields. Gold price managed to recover from 2021 lows this week and reached a 1-month high. As pick-up in yields is driving by rising inflation expectations, US CPI data for March on Tuesday, 1:30 pm BST will be watched closely. Apart from that, Fed Chair Powell will attend a Q&A session at the Economic Club of Washington on Wednesday, 5:00 pm BST and the event may lead to elevated volatility on the bond and gold markets.


GBPUSD dropped to a 2-week low near 1.3670 this week. Move came in spite of the UK Prime Minister Johnson announcement of relaxing coronavirus restrictions further. The question is whether it was just a correction or the beginning of a large downward move. Outlook for the UK economy is good and the country makes big progress when it comes to vaccines. UK industrial production and GDP data for February (Tuesday, 7:00 am BST) as well as the US retail sales for March (Thursday, 1:30 pm BST) are key releases for the pair next week.


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