Indices
American corporations will begin publishing their financial results for the second quarter right from this week with all public companies expected to reveal their progress by the end of the month.
The quarterly ‘’Earnings Season’’ coincides with the continuing discussions over the Fed’s stimulus programme future. These events are coming at a time of a slightly dampened investors’ enthusiasm, whose portfolios of US stocks lost some of their profits last week. Although the major U.S. indices rose by about 1% in the past five days, we definitely expect more interesting and unexpected movements on the stock market.
Meanwhile, the European markets had a week of moderate optimism. The German DAX30 added 1.41% to its value, closing at 7946 points on Friday; the French CAC40 reported a rise by 1.28% to 3732 points while the Spanish IBEX gained 0.75% and ended the period at 7770 points. The UK’s FTSE100 closed at 6218 points on Friday or 1.38% higher than the previous week. There was positive sentiment on the Japanese stock market as well with the Nikkei225 adding 2.34% to reach 13,661 points.
Forex
On the Forex market the chart’s picture has not changed much in the last few weeks. The U.S. dollar continued to gain advantage against other major currencies as market participants are expending their dollar positions in anticipation of tapering the Fed’s quantitative easing.
The most traded currency pair EUR/USD fell by 108 pips and ended the week at $1.3015. The ECB President Mario Draghi also ‘’contributed’’ to the single currency’s poor performance as he once again expressed readiness to implement additional monetary stimulus in attempts to revive the European economy.
The British pound was among the currencies which registered depreciation against the greenback along with the Aussie and the yen with the last two loosing 212 pips and 142 pips respectively.
Commodities
The big news on the commodities market came from gold (XAUUSD) as the precious metal fell below $1200 per troy ounce for the first time since 2010 during the Friday’s Asian session. Despite the subsequent correction and closing at $1233, gold lost 4.70% in the last week. Silver (XAGUSD) also had a bad week as it declined by 2.17% to $19.63 per troy ounce.
What to expect this week?
Monday’s highlights are coming mainly from the Euro zone with a leading event being the official accession of Croatia to the European Union today. The country became the 28th member of the EU, however with divided opinions among its citizens about the potential economic benefits, prompted by the Europe’s unstable and painful recovery from the crisis.
Other data will revealed the Markit Manufacturing PMI for June of several countries – France, Spain, Germany, Italy, Greece, UK, the Euro zone and later in the day the US as well. The rest of the session will see the Euro zone Core Consumer Price index for June along with the UK’s Consumer Credit and Mortgage Approvals, both for May.
Tuesday will offer the Reserve Bank of Australia’s interest rate decision as well as the UK’s PMI Construction for June and the U.S. Factory Orders for May.
Wednesday’s main entries will come from Australia’s Retail Sales and Trade Balance data both for May with the US also set to produce the Trade Balance for May. The Markit Services PMI for June will also draw investors’ attention with the UK, Italy, France, Germany and the Euro Zone due to publish their results.
Thursday is shaping as a short but intense day of economic events starting with the Bank of Japan’s Governor Kuroda speech, moving to Bank of England’s interest rate decision and Asset Purchase Facility for July and closing with the European Central Bank’s interest rate decision and press conference.
Friday’s attention will be focused on the US Nonfarm Payrolls for June along with the country’s Unemployment rate also for June.
Further reading: 6 Months in, What do the Forex Markets Have in Store for H2 2013?