Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
COMPARTIR
A tepid start to the week for financial markets. Developments surrounding Iran have slowed down over the last few days, with little to grab people’s attention and therefore little to move the needle as far as traders are concerned. Fundamentals are set to re-take the centre stage this week, thanks to ample contributions from both the economic and earnings calendars. Precious metals are showing almost no movement early this morning, with gold holding on to $4,700 per ounce and silver maintaining pace at $76. Currencies are equally relaxed, as traders await more significant catalysts later in the week. The one exception to the rule is Bitcoin, which briefly breached $79,000 this morning, its highest valuation since January.
Even crude oil is experiencing a rare period of stability, with prices largely unchanged from Friday. The Brent Crude benchmark is currently sitting at $106 per barrel, while the increasingly relevant WTI is trading for $95 in comparison. The United States has recently authorised the release of millions of barrels of oil from its Strategic Petroleum Reserve in order to help cover the global shortfall in crude deliveries. 80 million barrels have been released so far, the bulk of which is destined for Europe. The oil is being sold on the basis that it will be returned at a later date, likely several years from now. Such exchange mechanisms have been used before, notably following the outbreak of the conflict in Ukraine. Although the measure is useful for addressing acute imbalances in oil markets, the release remains a temporary fix, hence the lack of impact on crude prices.
The US Department of justice has ended the criminal investigation into Jerome Powell concerning cost overruns in the renovation of the Federal Reserve headquarters. The probe focused on whether the Fed Chairman had lied to the Senate Banking Committee regarding the project, which now boasts an official price tag of $2.5 billion, significantly surpassing initial budget estimates. The investigation did not sit well with committee member Thom Tillis, who had pledged to block the confirmation of Kevin Warsh, Jerome Powell’s successor, for as long as the current Fed Chairman remained under review. Now that the probe has been abandoned, Tillis has stated his intention to support Warsh and the Senate Banking Committee has scheduled an executive session on Wednesday morning to vote on the matter. Jerome Powell’s term as Fed Chairman officially ends next month, paving the way for a smooth transition to his replacement.
No fewer than five central bank decisions will take place this week, with the Bank of Japan the first to announce early tomorrow morning. The Bank of Canada and the US Federal Reserve follow on Wednesday, with neither expected to enact a change in interest rates this time around. This week’s meeting will mark Jerome Powell’s final decision as Fed Chairman and FedWatch is currently predicting a rate hold with near 100% certainty. The Bank of England and European Central Bank convene on Thursday but neither are likely to move rates in either direction. Beyond monetary policy announcements, the first preliminary Q1 growth estimates will make their appearance this week. The Eurozone is predicted to report 0.2% growth in the first quarter, falling far short of the 2.1% expected for the United States. Friday will see market closures throughout Europe and Asia in observance of labour day, although US and Japanese stock exchanges will remain open according to normal operating hours. Despite it being the first Friday of the month, non-farm payrolls will not be published until next week, in accordance with scheduled BLS releases.
The earnings calendar is equally busy, with five of the magnificent seven reporting this week. Alphabet (GOOG), Microsoft (MSFT), Amazon (AMZN) and Meta Platforms (META) all report after market close on Wednesday, while Apple (AAPL) will report the following day. Big tech aside, a number of other heavy hitters also make their appearance this week, including Visa (V) and Coca-Cola (KO) on Tuesday, Eli Lilly (LLY) and Mastercard (MA) on Thursday, and finally Exxon Mobil (XOM) and Chevron (CVX) on Friday.
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