Wall Street Street in Manhattan, New York, USA. Image source: pixemac © 123RF.com
ECB to Potentially Rethink its PEPP Timing Given Rising Inflation
The Governing Council of the European Central Bank is scheduled to meet on Thursday and deliberate on its current monetary policy stance. The bank is expected to maintain an accommodative stance by virtue of keeping the near-negative Main Refinancing Interest Rate unchanged at 0.00 per cent.
Traders and investors would be eager to see whether the ECB decides to recalibrate its Pandemic Emergency Purchase Programme (PEPP). At its last meeting, the Council decided to preserve the total purchasing envelope at 1.850 billion euros at least until the end of March 2022.
Europe needs to keep combatting the pandemic, President Christine @Lagarde tells @CNBCClosingBell. The ECB can expand its measures if needed, however pressing on with the recovery fund and vaccinations is now top priority. Read the full interview https://t.co/sh4SWqw6Q3 pic.twitter.com/Cw4L65lPHB
— European Central Bank (@ecb) April 12, 2021
The Council also expects "purchasing under the PEPP over the next quarter to be conducted at a significantly higher pace" based on "a joint assessment of financing conditions and the inflation outlook".
The effort is proving successful as headline inflation in the Eurozone has risen by 0.4 per cent over the previous month, underpinning a noticeable improvement in price stability. The trend of rising prices is likely to continue in April, thereby driving demand closer to ECB's medium-term goals.
Euro Area MoM Inflation Rate. Image source: TradingEconomics.com
With inflation on the rise and financial conditions improving, though at an uneven pace, the Governing Council now has more incentives to rethink the pace of the set of measures that it is currently implementing.
A potentially optimistic-sounding policy statement of the ECB could strengthen the euro, which gained significant ground against the dollar last week. Expect heightened volatility on the EURUSD pair around the time of the decision's publication.
Johnson & Johnson Expected to Beat Last Year's Performance Despite Vaccine Woes
The earnings season is continuing this week, with several notable releases set to shake the stock market. First up will be Johnson & Johnson, the U.S. pharmaceuticals giant, scheduled to post earnings data on Tuesday before the market open.
According to the preliminary market forecasts, the company is expected to publish Earnings per Share (EPS) of $2.31 for the first quarter of 2021. If realised, this performance would exceed marginally the $2.30 EPS that were posted for the same period last year.
Johnson & Johnson QoQ EPS Data. Image source: TradingEconomics.com
The company has had a rollercoaster of a 2020 with several hits and misses, and company executives would be hoping for a good start to the new year. The EPS data will be published in an already volatile market, as Johnson & Johnson's vaccine is currently being scrutinised over its safety.
The Struggles of Netflix's Share Price Likely to Persist in the Near Future
The streaming giant is also anticipated to release its EPS numbers for Q1 on Tuesday after the market close. The initial forecasts are quite optimistic as the company is expected to deliver earnings of $2.98 for the first quarter, which, if realised, would be the strongest quarterly performance on record. In contrast, Netflix posted EPS of $1.61 for the same period last year.
Netflix QoQ EPS Data. Image source: TradingEconomics.com
Even still, it should be noted that the company's performance has felt short of the consensus forecasts on each occasion over the last four quarters, which raises the likelihood of it failing to meet the expectations for a fifth consecutive time.
This could jolt Netflix's share price, which is already struggling to continue advancing higher, as it has been range-trading over the past several weeks. As can be seen on the 4H chart below, the stock is currently contained within two swing extremes.
Following its recent rebound from the psychologically significant support level at 500.00, the share price has resumed developing a pattern that closely resembles a Bearish Bat outline. This is a type of reversal pattern that typically is taken to signify a likely dropdown.
If the current upswing is exhausted around 571.00, which is where the Bearish Pattern should be completed, this would signal the likely emergence of such a dropdown. Its first major target would likely be the psychological support at 500.00.
Netflix failing to deliver earnings of $2.98 for Q1 could potentially serve as a catalyst for such a bearish rebound.
Netflix 4H Price Chart. Image source: Trendsharks ©, created with TradingView.com
Other Prominent Events to Watch for:
Monday - Coca-Cola Co. reporting BMO.
Tuesday - New Zealand CPI q/q; RBA Meeting Minutes; UK Unemployment Rate; ECB Bank lending survey; Lockheed Martin Corp. reporting BMO; Harley-Davidson Inc. reporting BMO.
Wednesday - Australia Retail Sales m/m; UK CPI y/y; BOE Governor Bailey Speaks; Canada CPI m/m; BOC Overnight Rate Decision; Nasdaq Inc. reporting BMO.
Thursday - American Airlines Group Inc. reporting BMO; AT&T Inc. reporting BMO; Intel Corp. reporting AMC.
Friday - French and German Services and Manufacturing PMI; UK Manufacturing and Services PMI; US Flash Manufacturing PMI; American Express Co. reporting BMO.
Over the past few weeks, the USD has lost nearly 800 pips against the JPY, driven by Japan's shift away from decades of negative interest rates. With the Bank of Japan raising rates for the second time in a row, investors are adjusting their positions to [...]
Despite its volatility, Silver remains in an uptrend. While not as dynamic as Gold, XAG often mirrors XAU’s movements. A Multiple Top has formed around $32.50, and history shows that the more a level is tested, the weaker it becomes, increasing the likelihood of a [...]
A combination of factors, including Trump-era tariffs, the emergence of DeepSeek, and a slowdown in GDP growth, has contributed to the recent pullback in the US30 from its record highs. From a technical standpoint, a Double Top pattern has formed around the [...]
Over the past month, Silver has experienced an impressive 13% surge, marking a strong bullish trend. Despite notable volatility and multiple pullbacks, the overall momentum remains firmly to the upside. This strength is further validated by the Golden Cross, a historically reliable [...]
The Swiss Stock Market has been on a remarkable rally, surging over 15% between December and January. At times, the price action resembled a near-vertical ascent. However, following the announcement of Trump’s tariffs over the weekend, Monday’s trading session opened with a [...]
Between October and January, GBPUSD experienced a significant decline, dropping by approximately 1300 pips. However, we now observe signs of a potential trend reversal. Over the past few weeks, the pair has rebounded by more than 400 pips, shifting momentum toward a [...]
For the past 1 month, the UK100 saw a fantastic 600 point rally! The occasional corrections only attracted more buyers, which is healthy for the current up trend and the RSI currently exhibits elevated demand. A 130 point correction started last week on Friday, dipped below the [...]
Over the past two weeks, Japan’s leading stock index surged 2,000 points, reflecting strong bullish momentum. However, this week saw a sharp sell-off, erasing nearly all gains since mid-January. Despite this drop, the decline stalled at the 61.8% Fibonacci retracement, a key [...]
There is a clear shift in the momentum in the Oil market, with the commodity dropping with nearly 10% for the past 2 weeks. The Death Cross, a classic sell signal, is indicating that sellers are indeed in control and we are lookin now at a strong [...]
The 350 pip rally for the past 2 weeks seems like a trend reversal for EURUSD, with buyers back in control. The strong bullish momentum is also confirmed by the Golden Cross, a historic buy signal. Corrections are healthy for the trend and we currently looking at [...]
For the past 2 weeks GBPUSD went up with 400 pips and this is why we believe we might be looking at a trend reversal. The strong bullish momentum is confirmed by the Golden Cross, a classic buy signal, which supports the hypothesis that [...]
The Death Cross formation in USDJPY signals a robust downward momentum, with the USD depreciating by 300 pips over recent weeks. Further declines exceeding 300 pips are anticipated, potentially reaching the 152.00 level. Despite several corrective pullbacks, the price has been unable to surpass the [...]
Following the formation of a Double Top pattern at the 21,930 level last Friday, the NASDAQ has experienced a significant decline, plummeting by nearly 800 points. This downturn has been primarily driven by unfavorable manufacturing data emerging from China, alongside the Bank of Japan's interest rate hike on Friday. The market reaction closely resembles the [...]
GOLD's uptrend has regained strength, with several factors supporting further gains. The RSI bounced from oversold levels and now stands at 65, signaling growing demand and increasing buying volume. Additionally, the appearance of a [...]
For the past few months, USDJPY gained 2100 pips! Then, about 10 days ago the USD started dropping and so far corrected with 300 pips, dropping down to 155.00. A local Double Bottom got formed and this level also aligns with the important [...]
For the past week, the US100 has surged by over 1,000 points, signaling strong bullish momentum. The RSI stands at 69, indicating high demand and buyer dominance. A bullish Golden Cross pattern has emerged, confirming the upward trend. Despite a brief correction yesterday, with the index dipping to [...]
The Descending Triangle on the 4-hour chart, typically a bearish signal, failed to materialize this time. Instead, the Triple Bottom support at 92,000 held strong, driving significant buying volume. A Golden Cross—a classic bullish indicator—confirms strong [...]
After a 300-point correction from its December highs, the SP500 appears to be rebounding as bulls regain control. This recovery is supported by positive economic data, including strong NFP numbers, low unemployment, and CPI readings meeting expectations—all favorable for stocks. Additionally, the earnings season began yesterday with [...]
For several months, the EUR has been trending downward, losing hundreds of pips. While occasional corrections to the upside occur, bears remain in control. The strong downward momentum is highlighted by the Death Cross pattern, a classic sell signal. Yesterday, we observed another [...]
The Dollar remains strong, with buyers firmly in control since the Fed's December comments hinting at fewer 2025 rate cuts. This drove a 400-pip rally in USDCAD, now facing resistance near 1.4450 as early buyers take profit. Corrections are part of healthy trends, and the pair is testing support at [...]
