Higher volatility as geopolitical risk rises (for Pluang)

CIO’S WEEK AHEAD 15 Apr 2024

Summary of Last Week & the Week Ahead

Market Movement:

Overall Sentiment:

On the global macro front, this week we are likely to see a focus on the geopolitical concerns in the Middle East. If Israel does not escalate or retaliate against recent attacks, we might observe an improvement in risk sentiment. However, if the situation remains tense, we can expect high volatility in the markets, which will likely swing based on both serious and sometimes inaccurate news headlines. It’s crucial to size your trades appropriately to account for the possibility of stop hunting. This often occurs when markets are volatile, and certain chart levels may be temporarily breached, especially in less liquid markets like stocks in less developed markets.

Despite the noise from headlines, it’s important to recognize that these do not typically alter the underlying trend, which is that these assets continue to gradually increase as investors keep buying. However, this trend could be questioned due to recent high inflation data from the US, though current price action confirms that investors are still active.

In other news, there’s positive development from Hong Kong for the crypto industry. The Hong Kong Securities Commissions have approved two digital asset ETFs, paving the way for investments into Bitcoin and Ethereum. This approval should attract more mainstream investors and make it easier for them to invest in the crypto space. This trend of increased accessibility for institutional investors is likely to drive the prices of major cryptocurrencies higher in the long run.

Noteworthy Earnings this Week

Monday: Goldman Sachs (GS)

Tuesday: Bank of America (BAC), Morgan Stanley (MS)

Wednesday: ASML (ASML)

Thursday: Netflix (NFLX)

Friday: Procter & Gamble (PG)

Current Bias

Currencies

No positions for now.

Interest Rates

None.

Equities

Bullish – US Inflation data was mixed last week. With the heightened geopolitical uncertainty in the Middle-East, volatility is likely to remain high. However, dips should still be bought as long the US Federal Reserve Chair Powell doesn’t change his tone about interest rate cuts this year.

Trade Opportunities of the Week

AUD/USD (Australian Dollar vs US Dollar) Weekly Candle & Ichimoku Cloud Chart

AUD has failed to break above the weekly Ichimoku cloud. It seems that rallies should be sold as the upside resistance at 0.6660 is getting stronger as time passes.

Events to Watch

Monday April 15 2024PreviousConsensusRemarks/Actual
2:30 PMUSFed Logan Speech
5:00 PMEAIndustrial Production MoM FEB-3% ®0.80%0.80%
6:00 PMEAECB Lane Speech
8:30 PMUSRetail Sales MoM MAR0.9% ®0.30%0.70%
8:30 PMUSNY Empire State Manufacturing Index APR-20.9-9-14.3
8:30 PMUSRetail Sales Ex Autos MoM MAR0.6% ®0.40%1%
10:00 PMUSBusiness Inventories MoM FEB0%0.30%0.40%
10:00 PMUSNAHB Housing Market Index APR515151
IFIMF/World Bank Spring Meetings
Tuesday April 16 2024PreviousConsensusRemarks/Actual
8:00 AMUSFed Daly Speech
9:30 AMCNHouse Price Index YoY MAR-1.40%-2.2%
10:00 AMCNGDP Growth Rate YoY Q15.20%5%5.3%
10:00 AMCNIndustrial Production YoY MAR7.00%5.40%4.5%
10:00 AMCNRetail Sales YoY MAR5.50%4.50%3.1%
10:00 AMCNFixed Asset Investment (YTD) YoY MAR4.20%4.30%4.5%
10:00 AMCNGDP Growth Rate QoQ Q11.00%1.6%
10:00 AMCNUnemployment Rate MARCH5.30%5.20%5.2%
2:00 PMGBUnemployment Rate FEB3.90%4.00%
2:00 PMGBAverage Earnings incl. Bonus (3Mo/Yr) FEB5.60%5.50%
2:00 PMGBEmployment Change FEB-21K
5:00 PMEABalance of Trade FEB€11.4B
5:00 PMEAZEW Economic Sentiment Index APR33.537.2
8:15 PMCAHousing Starts MAR253.5K244K
8:30 PMCAInflation Rate YoY MAR2.80%
8:30 PMCACore Inflation Rate YoY MAR2.10%
8:30 PMCAInflation Rate MoM MAR0.30%0.70%
8:30 PMUSBuilding Permits Prel MAR1.524M1.514M
8:30 PMUSBuilding Permits MoM Prel MAR2.40%
8:30 PMUSHousing Starts MAR1.521M1.48M
8:30 PMUSHousing Starts MoM MAR10.70%
9:15 PMUSIndustrial Production MoM MAR0.10%0.40%
IFIMF/World Bank Spring Meetings
Wednesday April 17 2024PreviousConsensusRemarks/Actual
1:00 AMGBBoE Gov Bailey Speech
1:15 AMCABoC Gov Macklem Speech
4:30 AMUSAPI Crude Oil Stock Change APR/123.034M
6:45 AMNZInflation Rate QoQ Q10.50%0.60%
2:00 PMGBInflation Rate YoY MAR3.40%3.10%
2:00 PMGBCore Inflation Rate YoY MAR4.50%4.10%
2:00 PMGBInflation Rate MoM MAR0.60%
5:00 PMEAInflation Rate YoY Final MAR2.60%2.40%
10:30 PMUSEIA Crude Oil Stocks Change APR/125.841M
10:30 PMUSEIA Gasoline Stocks Change APR/120.715M
IFIMF/World Bank Spring Meetings
CNFDI (YTD) YoY MAR-19.90%
Thursday April 18 2024PreviousConsensusRemarks/Actual
12:00 AMGBBoE Gov Bailey Speech
2:00 AMGBBoE Haskel Speech
4:00 AMUSNet Long-term TIC Flows FEB$36.1B$40.2B
5:30 AMUSFed Mester Speech
9:30 AMAUEmployment Change MAR116.5K7.2K
9:30 AMAUFull Time Employment Chg MAR78.2K
9:30 AMAUPart Time Employment Chg MAR38.3K
9:30 AMAURBA Bulletin
9:30 AMAUUnemployment Rate MAR3.70%3.90%
8:30 PMUSInitial Jobless Claims APR/13211K214K
8:30 PMUSPhiladelphia Fed Manufacturing Index APR3.20.8
9:15 PMUSFed Williams Speech
10:00 PMUSExisting Home Sales MAR4.38M4.2M
10:00 PMUSExisting Home Sales MoM MAR9.50%
11:00 PMUSFed Bostic Speech
IFIMF/World Bank Spring Meetings
Friday April 19 2024PreviousConsensusRemarks/Actual
5:45 AMUSFed Bostic Speech
2:00 PMGBRetail Sales MoM MAR0%0.30%
2:00 PMGBRetail Sales ex Fuel MoM MAR0.20%
2:00 PMGBRetail Sales YoY MAR-0.40%
10:15 PMGBBoE Breeden Speech
10:15 PMGBBoE Ramsden Speech
10:30 PMUSFed Goolsbee Speech
IFIMF/World Bank Spring Meetings
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