At the beginning of this week, considering the reduced geopolitical risks, it can be said that the market has turned slightly risk-off. However, currently, the markets will be influenced by two fundamental factors. The first is the earnings reports of major US companies, and the second is the possibility of the Fed’s first move to reduce interest rates. Nonetheless, stock markets are facing a valuation of the dollar on one hand and the potential addition of a new war to the world with all the costs and pressures it could impose on economies and companies on the other hand. Therefore, given these circumstances, the stock market did not have a good start in Q1 2024. However, the stock market performed well compared to many other assets in the past year. Let’s review the events that happened in the markets on Monday and how the market conditions will be for Tuesday.
Economic Events:
The economic calendar passed quietly on Tuesday, with only the European Central Bank President Lagarde delivering a speech, emphasizing the importance, as always, of observing more data before making decisions regarding interest rate cuts. However, markets during these officials’ speeches are mostly looking for phrases like ‘concerns about the pace of inflation reduction,’ ‘potential recession,’ weakening job market, and similar indicators. Today’s calendar lacks any data with high impact similar to yesterday’s. However, the PMI S&P Global will be released, with market expectations indicating an increase in the PMI for both the manufacturing and services sectors.
Source : Dailyfx
Earnings:
One of the most important income reports related to the electric car giant, Tesla, is set to be released after the market closes today.
Tesla has faced significant challenges in electric vehicle sales in recent months. According to many automotive market analysts, Tesla vehicles are being offered at prices higher than their true value and do not offer acceptable quality relative to their price. On the other hand, since the beginning of the Russia-Ukraine conflict and the sanctions against Russia, and the withdrawal of companies from this country, we have witnessed that Tesla, unlike its German competitors such as Mercedes-Benz and BMW, has been unable to capture alternative markets because the infrastructure for electric vehicles has not yet been established worldwide. All of these factors have put Tesla in a difficult position. It remains to be seen what impact the company’s income report will have on its situation.
Source : Earnings Whispers
Gold (XAUUSD):
With geopolitical risks decreasing on one side and the shadow of recession or even stagflation diminishing on the other side from the global economy, a wave of corrective momentum has begun in the gold market. However, the pricing of the dollar plays a significant role in gold prices. If the market moves towards pricing in interest rate cuts, gold comes under significant selling pressure.
S&P500:
The S&P 500 index rallied on the first day of the week. Currently, the indices are influenced by earnings reports. Increased demand for this index could push it up to the range of $5034 and then $5061. However, for the price of this index, we should pay more attention to Tesla’s reports and even consider income reports throughout the week, such as Microsoft and Google.
Foreign Exchange Market (FOREX):
Source : Babypips
In the currency market, a significant weakening of the New Zealand dollar was witnessed
The Australian dollar was the best-performing currency against the New Zealand dollar. For today, there is a possibility of further strengthening of the Australian dollar and, on the other hand, a potential weakening of the US dollar. Additionally, further strengthening of the pound is being monitored after reaching a support level in the GBP/USD exchange rate.
The focus of the currency market for the rest of the week is on the interest rate decision session for Japan, which will be announced early Friday morning.
Below are a few examples of major currency pairs
GBPUSD (4H) :
NZDUSD (4H) :
Bitcoin (BTC):
An increase in demand is being witnessed only 4 days after the Halving event. However, it can be said that the most risky market at present is the Bitcoin market. Some selling pressure is causing miners to exit. Nevertheless, conditions have been relatively favorable for this asset so far. Currently, an upward momentum can be observed for this index. Please see the important supply and demand ranges on the chart.
US Crude Oil WTI :
For today, an increase in negative momentum is expected for oil, while an upward momentum is anticipated for stock indices. Despite the long-term downward trend, the stock market is predicted to potentially form a counter-trend.
Most attention is focused on the potential momentum of Bitcoin under the influence of Halving and Tesla’s income report.
The MTC team wishes you a great day ahead!
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