European equity markets are currently on course to open a little higher but these gains are marginal and at this stage only represent a slight paring of Monday’s losses. Weakness in commodity markets – usually associated with the risk-off trade – weighed on indices on Monday and again during the overnight session in Asia, and could continue to do so throughout trade today (Tuesday, April 26).
We could be in for another rocky week in the markets with particular focus back on the central banks as we get the latest monetary policy decisions from the Federal Reserve and Bank of Japan, the latter of which is expected to announce new stimulus measures.
Like their counterparts in Europe, U.S. indices are expected to start the final trading session of the week in the red as earnings season continues to underwhelm on both continents and the economic data doesn’t give much to be happier about.
The European Central Bank decision and press conference today may not be quite the event that it was in March but with the bazooka still warm following last month’s antics, Mario Draghi may instead see today as an opportunity to take some of the fizz out of the euro, something he failed to do previously.
Brent and WTI crude are coming under pressure again on Wednesday after oil workers in Kuwait agreed to end their strike against wage and job cuts and work to return output to pre-strike levels. Despite an initial sell-off on Monday, the strike in Kuwait which wiped out the 1.5 million barrels of excess supply each day, had managed to more than offset the disappointment at the lack of a deal in Doha over the weekend that would have seen a number of major oil producers freeze output.
U.S. equity markets are expected to open slightly lower on the final trading day of the week, as investors eye a number of key economic reports and important meetings of the G20 and major oil producers. Crude oil is trading a little lower so far today having entered into consolidation mode since Wednesday, as traders adopt a cautious approach ahead of Sunday’s meeting of oil producers in Doha.
U.S. stock markets are poised to open slightly higher on Tuesday as traders eye API inventory data and a few Fed speeches throughout the session. There’ll also be an eye on the earnings season this week, which got underway on Monday with Alcoa releasing some disappointing numbers.