Saxo Spotlight: What’s on the radar for traders and investors this week? | Saxo Bank

Key Support Levels in Forex Pairs: EURUSD, GBPUSD, and EURGBP

Summary:  The US equity markets remain on the verge of a bear market after a brief foray into that territory on Friday. We are entering the last week for major Q1 earnings with retailers on watch again, and it is also the week before the Fed starts to tighten its balance sheet from June 1. PMI releases will be keenly watched for any recession risks while a global food crisis also remains a key focus especially as the World Economic Forum kicks off.


Will more pain come from consumer spending stocks reporting this week? Costco, Best Buy and Dollar General report earnings this week. Will their stocks freefall like Walmart and Target did last week, amid weaker guidance levels for the year ahead? $550 billion in market value was wiped from consumer stocks over the last five days, while experiential economy/reopening stocks like United Airlines and American Airlines finished virtually steady. That reflects what’s going on at the moment and our preference for reopening stocks over household goods stocks. Also on watch will be earnings from pandemic era favourites such as Zoom.

Fed minutes and US core PCE inflation. As we head into the final week before the Federal Reserve begins to tighten its balance sheet from June 1, focus will be entirely on the Fed minutes due Wednesday to again looks for any hints of possible 75bps rate hikes in the coming months. While the base case stays at a series of 50bps rate hikes to follow, investors are also increasingly parsing Fed talk to look for signs of stagflation or economic slowdown and that really is driving the market sentiment for now. Fed minutes will especially be key for the FX markets, and focus will be on EUR and JPY. April core PCE inflation data will also be key to parse the strength of the US consumer through the high inflation periods especially after the shock retailer earnings last week.

Flash global and Eurozone PMIs. With inflation concerns being increasingly priced in by the markets, focus is now shifting to the possibility and extent of economic slowdown, and Eurozone likely faces the biggest threat in that regard. Flash Eurozone PMIs will be on watch to gauge the extent of damage to the economy.

China’s economic calendar is light this week with only April industrial profits on Friday.  Investors have already discounted extremely weak economic activities in April and are now looking beyond the month of April and focusing on if economic activities have recovered in May.  Korea’s May 1-20 Exports to China coming at +6.8% YoY, bouncing back from the +1.8% print in April.  Being an important supplier of intermediate good to China, this probably offers a moderately positive glimpse of the Chinese manufacturing industries for May. 

Agricultural sector & stocks front and centre. With only 10 weeks of global wheat supplies left, agricultural stocks are once again in the spotlight, fuelled by record price rises in wheat, corn and soybeans and grain, pushing ag stocks to the best performing posts for the month, and year. Local grain producers and sellers like Elders (ELD) and Graincorp (GNC) are up over 10% YTD and are hitting new record levels, with Elders for example saying Australian crop conditions will bolster, and cattle and sheep prices will remain high, which will push its earnings 30% higher than last years record. Fertilizer stocks like Nutrien (NTR) and Mosaic (MOS) are also riding high, up over 20% this year.

Davos meeting. Global leaders gather in Davos, Switzerland as the World Economic Forum holds its in-person annual meeting after two years. The theme of the summit is “History at a Turning Point: Government Policies and Business Strategies”, and it will focus on key topics such as pandemic recovery, tackling climate change, the future for work, accelerating stakeholder capitalism, and harnessing new technologies – most of which are key inputs for our equity theme baskets.

Alibaba (09988) reports March 2022 quarterly results on Thursday.  Consensus estimates are calling for a 7% increase in revenues and a 29% fall in earnings YoY.  Analysts are concerned that the Company may report a decline in customer management revenues (ads & commissions) and slower growth in cloud revenues.  Tencent’s disappointing results in its cloud business and glim assessment of the prospect of cloud services in China have intensified investors’ worries about Alibaba’s cloud service revenues. 

RBNZ to hike. The Reserve Bank of New Zealand is pushing for aggressive tightening amid the high inflation concerns as energy prices rise. They aim to raise rates to above neutral by the end of the year, and risk of jumbo rate hikes is looming large.

Source: Saxo Bank

Key Support Levels in Forex Pairs: EURUSD, GBPUSD, and EURGBP

Saxo Bank

Saxo Bank is a global investment bank with a Danish banking license.
It is subject to strict regulation in 15 jurisdictions, including Denmark, the United Kingdom, and Singapore. We also hold banking licenses in Denmark and Switzerland.
When you invest with Saxo Bank, you have access to a state-of-the-art trading platform and over 40,000 financial instruments, including more than 22,000 stocks from 50 stock exchanges worldwide. It also provides access to global analyses prepared by a world-class analytical team.