Market Anticipates Key Inflation and Retail Data, Corporate Earnings in Focus

By Tomasz Wisniewski|

Published: July 18 2023, 06:18 GMT+0

Market Anticipates Key Inflation and Retail Data, Corporate Earnings in Focus

As we venture further into this trading week, it’s crucial to understand the current market dynamics that will shape our investment decisions. Yesterday marked a somewhat static day in the markets, with relatively low volatility and no remarkable moves to note. However, it’s essential to keep our eyes on the evolving trends.

Starting with the Forex market, the Swiss Franc emerged as the strongest currency on Monday. The weakest contenders were the New Zealand dollar and the Australian dollar, but Tuesday has brought about a shift. Safe havens are ruling the roost today, with the Swiss Franc holding firm and the Japanese Yen leading the charge. Contrarily, the American dollar and the New Zealand dollar are falling behind, but the shifts aren’t substantial.

Indices took a more tranquil route on Monday, edging sideways while lingering close to their local peaks. This movement suggests a continued positive sentiment among investors, aligning with the general trend observed in recent weeks.

Taking a quick detour to the commodities market, the beginning of the week was greeted on Gold with an encouraging upswing. This move potentially marks the end of the correction phase observed at the close of the previous week. Silver also made headlines, registering new mid-term highs. However, oil finds itself in a somewhat precarious position, seemingly reverting back inside the sideways trend experienced during May and June. This change brings into question the validity of the buy signal seen last week.

In terms of economic data, several key announcements are on the horizon. The day began with the policy meeting minutes from Australia, where the Central Bank decided to hold interest rates steady. However, the Bank hinted at the necessity for some tightening to usher inflation towards the target. The Reserve Bank of Australia board also discussed raising the cash rate by 25 basis points before opting for a pause, acknowledging the strength of both sets of arguments.

Later today, we’ll be privy to a slew of data from Canada, including the highly anticipated inflation number. Additionally, US retail sales are expected to show an increase compared to previous figures, further shedding light on the economy’s health.

Finally, today also marks the release of several significant earnings reports. Major corporations including Bank of America, Novartis, Morgan Stanley, and Lockheed Martin are set to disclose their figures, likely impacting market trends.