Get Premium Data for Cyber Monday: Up to 55% Off InvestingProCLAIM SALE

Morning Bid: Markets enter the eye of risk-event storm

Published 2024/10/25, 06:37
Updated 2024/10/25, 06:44
© Reuters. Banknotes of Japanese yen and U.S. dollar are seen in this illustration picture taken September 23, 2022. REUTERS/Florence Lo/Illustration/ File Photo
STOXX50
-
MSFT
-
NWG
-
SASY
-
GOOGL
-
AAPL
-
AMZN
-
TSLA
-
META
-
STOXX
-

A look at the day ahead in European and global markets from Kevin Buckland

Yields are mercifully lower as the week draws to a close, removing some of the angst that has weighed on equities and allowing the beaten-down yen and euro to regain some composure against the dollar.

But this relative calm feels like the eye of the storm as risk events swirl on the horizon next week: mega-cap earnings from five of the "Magnificent 7"; a highly consequential U.S. payrolls report on Friday; and the final lap going into a likely photo-finish U.S. presidential election on Nov. 5.

The "Trump trade" has been gathering momentum with a sharp rise in the odds of a second Donald Trump presidency on some betting platforms, although polls have the race neck-and-neck.

The upshot in markets thus far is a dollar on track for a fourth week of gains and Treasury yields set for a sixth weekly advance, on Trump's platform of more tariffs and taxes, seen as inflationary by many in the markets.

Meanwhile, a spate of robust U.S. economic data has spurred a rapid paring back of bets on Fed easing, which is also buoying yields and the dollar.

Stocks are getting a little respite to finish the week but it's far from a recovery. Optimism over Tesla (NASDAQ:TSLA)'s earnings was the driver for most of Wall Street's limited overnight gains, and the Dow actually fell. Investors are now looking ahead to earnings from Alphabet (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), Meta (NASDAQ:META) and Microsoft (NASDAQ:MSFT) over a three-day period from Tuesday.

Stocks in Asia are mixed, with Japan's Nikkei sliding 1% amid a rebound in the yen and uncertainty over a general election on Sunday that could deprive the coalition government of its lower house majority.

The MSCI world equity index is still limping towards a 1.2% loss for the week, set to snap a two-week winning streak.

Pan-European STOXX 50 futures are pointing slightly lower, with the cash STOXX 600 heading for a 1.1% weekly decline.

For Europe, the docket of scheduled events is on the lighter side: Germany's Ifo surveys headline the macro calendar for Friday, while earnings are due from Sanofi (EPA:SASY), Natwest and Mercedes-Benz, among others.

Later in Washington, the annual IMF-World Bank meetings - where policymakers of all stripes step up to air their views - enter the penultimate day. Japanese officials have used the venue to issue warnings to speculators against pushing down the yen. Bank of England Governor Andrew Bailey speaks on Saturday.

Key developments that could influence markets on Friday:

-German Ifo surveys (Oct)

© Reuters. Banknotes of Japanese yen and U.S. dollar are seen in this illustration picture taken September 23, 2022. REUTERS/Florence Lo/Illustration/ File Photo

-Earnings from Sanofi, Natwest and Mercedes-Benz

-IMF-World Bank meetings in Washington DC

(By Kevin Buckland; Editing by Edmund Klamann)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.