It’s another big week in markets as a combination of new and recurring themes are expected to continue to drive volatility in the second quarter.
New themes include the start of earnings season in the US and the upcoming French elections, which will bring fresh impetus to markets.
Meanwhile, first-quarter themes such as central bank rate decisions and inflationary data will continue to be a main driver in pricing action during this quarter.
This week saw the release of the all-important US inflation figures on Tuesday, while UK inflation numbers will be released on Wednesday.
Inflation and the US Federal Reserve’s sensitivity to further price pressures will continue to drive stock pricing. Investors expect the Fed to maintain its hawkish stance and stick to the path of increasing interest rates more aggressively this year, especially if inflation continues to surge in the US.
The Reserve Bank of New Zealand, the Bank of Canada (BoC) and the European Central Bank (ECB) will announce their interest rate decisions this week.
The headline will be the BoC’s rate decision on Wednesday. The expectation is that it will increase rates but this time we can expect it to double the rate of increase.
The forecasts are for an increase of 0.5 per cent, taking the overall interest rate to 1 per cent. If this materialises, the Canadian dollar will come in for a nice bout of strength.
The ECB’s interest rate decision follows on Thursday. At present, markets are not positioning for an increase as the ECB maintained in its previous statement that the requirements for raising interest rates have been fulfilled.
Slowing growth and inflationary threats in the euro-area coupled with the continuing Russia-Ukraine crisis are weighing heavily on the common currency
Gaurav Kashyap,
risk manager at Equiti Securities Currencies Brokers
The euro has come under pressure against its major counterparts. Slowing growth and inflationary threats in the euro-area, coupled with the continuing Russia-Ukraine crisis, are weighing heavily on the common currency.
Add to this another key emerging theme — the French elections — and it could become a very bumpy ride for euro bulls.
While incumbent President Emmanuel Macron won the first-round ballet against Marine Le Pen on Sunday, opinion polls suggest that the presidential run-off is much closer than expected.
The EUR/USD has not taken much confidence from Mr Macron's first-round win and it is expected to remain under pressure until the climax of the run-off, which culminates with a second round of voting on April 24.
In the commodities market, oil prices moved below $100 a barrel last week as a significant emergency release announced by the International Energy Agency weighed heavily on prices.
The recent gains for oil will remain capped as a combination of resurgent Covid-19 cases in China, global economic slowdown concerns and more hawkish central banks keep prices in check.
Gold has continued to consolidate at $1,920 an ounce.
With the bulk of the central banks’ interest rate decisions already priced in, keep an eye out for inflationary data.
If we continue to see higher inflationary prints in developed economies, the current bull run in the precious metal will persist in the interim.
Finally, earnings season is set to kick off with banking giants JP Morgan, Goldman Sachs, Bank of America and Citigroup all reporting this week.
It will be interesting to note the continuation of the current cyclical rotation in US stocks.
The build-up of positions in tech and communication stocks at the onset of the coronavirus pandemic in 2020 continues to be unwound. This theme is set to remain as losses on the Nasdaq outpace the S&P 500 and Dow Jones, which is seemingly the most resilient.
This trend shows that American equity traders are continuing their pivot from tech-heavy stocks into more traditional industries such as energy, industrials and financials. Expect this rotation to persist.
The more hawkish Fed has also affected US Treasuries. Last week, the benchmark 10-year US Treasury yield inched past 2.7 per cent for the first time in three years.
Higher borrowing costs will also continue to weigh heavily on tech stocks and on the broader stock market in general as investors look to higher Treasury yields.
Gaurav Kashyap is risk manager at Equiti Securities Currencies Brokers. The views and opinions expressed in this article are those of the author and do not reflect the views of Equiti Securities Currencies Brokers
Killing of Qassem Suleimani
Where to apply
Applicants should send their completed applications - CV, covering letter, sample(s) of your work, letter of recommendation - to Nick March, Assistant Editor in Chief at The National and UAE programme administrator for the Rosalynn Carter Fellowships for Mental Health Journalism, by 5pm on April 30, 2020.
Please send applications to nmarch@thenational.ae and please mark the subject line as “Rosalynn Carter Fellowship for Mental Health Journalism (UAE programme application)”.
The local advisory board will consider all applications and will interview a short list of candidates in Abu Dhabi in June 2020. Successful candidates will be informed before July 30, 2020.
No Shame
Lily Allen
(Parlophone)
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Killing of Qassem Suleimani
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COMPANY%20PROFILE
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Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Marital status: Single
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
UAE%20athletes%20heading%20to%20Paris%202024
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Zimbabwe v UAE, ODI series
All matches at the Harare Sports Club
- 1st ODI, Wednesday, April 10
- 2nd ODI, Friday, April 12
- 3rd ODI, Sunday, April 14
- 4th ODI, Sunday, April 16
Squads:
- UAE: Mohammed Naveed (captain), Rohan Mustafa, Ashfaq Ahmed, Shaiman Anwar, Mohammed Usman, CP Rizwan, Chirag Suri, Mohammed Boota, Ghulam Shabber, Sultan Ahmed, Imran Haider, Amir Hayat, Zahoor Khan, Qadeer Ahmed
- Zimbabwe: Peter Moor (captain), Solomon Mire, Brian Chari, Regis Chakabva, Sean Williams, Timycen Maruma, Sikandar Raza, Donald Tiripano, Kyle Jarvis, Tendai Chatara, Chris Mpofu, Craig Ervine, Brandon Mavuta, Ainsley Ndlovu, Tony Munyonga, Elton Chigumbura
ABU%20DHABI%20CARD
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Racecard
6pm: The Pointe - Conditions (TB) Dh82,500 (Turf) 1,400m
6.35pm: Palm West Beach - Maiden (TB) Dh82,500 (T) 1,800m
7.10pm: The View at the Palm - Handicap (TB) Dh85,000 (Dirt) 1,400m
7.45pm: Nakeel Graduate Stakes - Conditions (TB) Dh100,000 (T) 1,600m
8.20pm: Club Vista Mare - Handicap (TB) Dh95,000 (D) 1,900m
8.55pm: The Palm Fountain - Handicap (TB) Dh95,000 (D) 1,200m
9.30pm: The Palm Tower - Handicap (TB) Dh87,500 (T) 1,600m
The specs
Engine: 3.9-litre twin-turbo V8
Transmission: seven-speed
Power: 620bhp
Torque: 760Nm
Price: Dh898,000
On sale: now
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Fight card
Preliminaries:
Nouredine Samir (UAE) v Sheroz Kholmirzav (UZB); Lucas Porst (SWE) v Ellis Barboza (GBR); Mouhmad Amine Alharar (MAR) v Mohammed Mardi (UAE); Ibrahim Bilal (UAE) v Spyro Besiri (GRE); Aslamjan Ortikov (UZB) v Joshua Ridgwell (GBR)
Main card:
Carlos Prates (BRA) v Dmitry Valent (BLR); Bobirjon Tagiev (UZB) v Valentin Thibaut (FRA); Arthur Meyer (FRA) v Hicham Moujtahid (BEL); Ines Es Salehy (BEL) v Myriame Djedidi (FRA); Craig Coakley (IRE) v Deniz Demirkapu (TUR); Artem Avanesov (ARM) v Badreddine Attif (MAR); Abdulvosid Buranov (RUS) v Akram Hamidi (FRA)
Title card:
Intercontinental Lightweight: Ilyass Habibali (UAE) v Angel Marquez (ESP)
Intercontinental Middleweight: Amine El Moatassime (UAE) v Francesco Iadanza (ITA)
Asian Featherweight: Zakaria El Jamari (UAE) v Phillip Delarmino (PHI)
Switching%20sides
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'Will%20of%20the%20People'
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Empty Words
By Mario Levrero
(Coffee House Press)
more from Janine di Giovanni
Founders: Abdulmajeed Alsukhan, Turki Bin Zarah and Abdulmohsen Albabtain.
Based: Riyadh
Offices: UAE, Vietnam and Germany
Founded: September, 2020
Number of employees: 70
Sector: FinTech, online payment solutions
Funding to date: $116m in two funding rounds
Investors: Checkout.com, Impact46, Vision Ventures, Wealth Well, Seedra, Khwarizmi, Hala Ventures, Nama Ventures and family offices
UAE currency: the story behind the money in your pockets
More coverage from the Future Forum
ICC men's cricketer of the year
2004 - Rahul Dravid (IND) ; 2005 - Jacques Kallis (SA) and Andrew Flintoff (ENG); 2006 - Ricky Ponting (AUS); 2007 - Ricky Ponting; 2008 - Shivnarine Chanderpaul (WI); 2009 - Mitchell Johnson (AUS); 2010 - Sachin Tendulkar (IND); 2011 - Jonathan Trott (ENG); 2012 - Kumar Sangakkara (SL); 2013 - Michael Clarke (AUS); 2014 - Mitchell Johnson; 2015 - Steve Smith (AUS); 2016 - Ravichandran Ashwin (IND); 2017 - Virat Kohli (IND); 2018 - Virat Kohli; 2019 - Ben Stokes (ENG); 2021 - Shaheen Afridi
