The rally in risk assets is set to continue this week as investors digest recent data and get a closer look at US corporate earnings. The trading week finished strongly on Friday night, and futures indicate the risk positive moves will continue this morning. Falls in crypto markets and support for the US dollar in early trading may mean some moderation of the enthusiasm.
Stronger activity and inflation data last week spurred positive momentum in shares and industrial commodities, as well as commodity currencies. Any pressure on interest rates seemed to fly under the market radar. The run may continue, with trade data from Japan this morning showing better than forecast growth in both imports and exports. Inflation in Japan and the UK later this week could influence trading, as will the PMIs from Europe that start dropping later in the week.
US company reports take centre stage this week after financials stocks laid a solid base last week. Coca Cola and IBM report tonight, starting a week that is packed with household names. Shareholders will hear from Netflix, Johnson and Johnson, Proctor and Gamble and Verizon, among many others. Almost half of the top 500 companies will report over the coming fortnight.
Cryptocurrencies had another wild weekend, and came under immediate pressure at this morning’s re-opening of futures trading. Bitcoin is trading with a US $56,000 handle, well down from highs near $65,000.
Lithium miners are a focus for traders following the announcement this morning of a $4 billion merger between Orocobre and Galaxy Resources. The combined group becomes the globes 5th largest Lithium producer. Travel stocks could also find support as Australian / New Zealand quarantine free travel arrangement gets underway.