The Italian Prime Minister Mario Draghi wanted to resign yesterday, after the Five Star party, which is the second biggest party in Draghi’s coalition government, boycotted a confidence vote in the senate; they didn’t quite like Mario’s response to the economic crisis. Draghi’s resignation sent the Italian 10-year yield 5% higher yesterday, the euro softened. Elsewhere, the dollar retreated after advancing to a fresh high of 109.30, after two FOMC members, Waller and Bullard said that they are willing to support a 75bp hike at this month’s FOMC meeting rather than a 100bp hike as suggested by the market reaction to this week’s scary inflation report.
Gold remains under a decent selling pressure against the US dollar, as the dollar strength eclipses the gold’s strength. The dollar-yen prepares to test the 140 level, and the dollar-franc is back to 99 cents. Market attention finally shifts to the earnings from the economic data, and depending on what we will see, it’s maybe a good thing, or not. Many analysts have been lowering their earnings estimates for the 2Q but the expectations may be too strong compared to the reality of the field. And that’s a downside risk for the US stocks walking into the earnings season. And indeed, the first results were not enchanting. JP Morgan and Morgan Stanley were the first big US banks to release earnings yesterday, and their results rather disappointed.
Watch the full episode to find out more!
0:36 Draghi drama is bad for the ECB policy!
5:18 Strong dollar weighs on gold, and G10
6:35 Are earnings expectations too strong & what’s the risk?
Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020. #Draghi #resignation #Italy #EUR #ECB #USD #inflation #Fed #100bp #rate #hike #GBP #CAD #XAU #gold #bank #earnings #JPMorgan #MorganStanley #SPX #Dow #Nasdaq #investing #trading #equities #stocks #cryptocurrencies #FX #bonds #markets #news #Swissquote #MarketTalk #marketanalysis #marketcommentary _____ Learn the fundamentals of trading at your own pace with Swissquote's Education Center. Discover our online courses, webinars and eBooks: https://swq.ch/wr _____ Discover our brand and philosophy: https://swq.ch/wq Learn more about our employees: https://swq.ch/d5 _____ Let's stay connected: LinkedIn: https://swq.ch/cH