Markets rise even as global markets growth concerns remain
FTSE => The index rises towards 7500
JD.Com => The stock holds over $50.00
EUR/USD => The pair rises towards 104.50
FTSE rises ahead of UK unemployment data
The UK index closed higher yesterday despite warnings from the BoE governor Andrew Bailey over surging inflation and a worrying rise in food pieces. Andrew Bailey insisted that the BoE would raise interest rates until inflation falls from the expected double-digit peak to the central bank’s 2% target. Attention will now turn to the UK jobs data, which will likely show that the labor market continues to hold up firmly. Unemployment is expected to remain below its pre-covid level and vacancies around 1 million, highlighting how tight the labor market is.
| UK unemployment | Expected: 3.8% (0%) | Previous: 3.8% |
Where next for the FTSE?
The FTSE rebounded off 7155, the May low, rising above several resistance levels. The recapturing of the 50 & 100 sma combined with the bullish crossover on the MACD raises hopes of further upside. Buyers will need to break above resistance at 7500 to continue the bullish trend, opening the door to the resistance zone between 7620 to 7650 ahead of 7690 and fresh post-pandemic highs. On the downside, failure to retake 7500 resistance could see the index price fall back to the 50 & 100 sma at 7465 and 7430. A break below here could open the door to 7350 and 7155.
JD.com Q1 earnings
Chinese online retailer giant JD.com will release Q1 earnings before the US open today. The market expectation is for EPS of $0.24 on revenue of $34.72, making a 37% fall in EPS year on year and 10% revenue growth year on year. JD.com is grappling with a toxic combination of slowing growth, slowing retail sales and rising costs which are set to squeeze profitability in the first three months of the year. This could mark the fourth straight quarter of slower top-line growth amid increasing competition. US regulatory threats surrounding listing also continue to weigh heavily on the sector.
EUR/USD rise ahead of EZ GDP, US retail sales
EUR/USD rose 0.4% in the previous session, boosted by a broad risk-on environment and soaring German PPI inflation, which reached a record high. Meanwhile, the market managed to brush off the European Commission, slashing the economic growth forecast to 2.7% in 2022, down from 4% previously. Meanwhile, Goldman Sachs cut the US GDP growth forecast to 2.4%, down from 2.6% in 2022. Today, the pair is edging higher ahead of eurozone GDP data which is expected to confirm sluggish growth in the first three months of 2021. From the US, attention will be on US retail sales, which are expected to show that the consumer remains resilient despite inflation remaining high at around a 40-year high.
| EZ GDP QoQ
US retail sales MoM |
Expected: 0.2% (0%)
Expected: 0.6% (0.1%) |
Previous: 0.2%
Previous: 0.5% |
Support can be found at 1.0354 (2022 low) and 1.03 (round number).
Resistance for the pair can be seen at 1.0480 (April low) and 1.0540 (falling trendline resistance).
