Weekly Outlook | Markets At Crossroads

Important events this week:

The recent fallout between Donald Trump and Elon Musk did not influence markets much so far but might cause an even bigger impact medium- term. The CEO of Tesla was a reason, why Trump won the state of Pennsylvania during the election, not only by having paid USD 270 million for the election campaign. On the other hand, public support for his space program helped him to support his businesses. Since the situation remains unsolved the impact on the domestic as well as foreign policy might still be felt at some point soon.

Back to market news the NFP report revealed that less jobs had been created compared to the reading in the previous month. The impact should not be big, though as the focus of the Federal Reserve Central Bank might rather be on the important data coming in this week.

– US – consumer price data– During this trading week the focus might be on the consumer price index. The core rate is expected to rise on a monthly basis from 0.2% to 0.3%. Important to notice might be that the PCE price index from the 30^th of May did not reveal a rise in prices, which seems rather astonishing in light of the implementation of tariffs in April. Recent comment from the CEO of the world’s biggest retailer, Walmart, pointed out that prices will need to be adjusted as the tariffs cause prices to climb.

GBPUSD weekly chart

The weekly chart of the GBPUSD currency pair reveals that the market could be ripe for a correction to lower levels. Since the price is currently trading in slight overbought territory a push to the downside might occur, initiated by a stronger Dollar. The Federal Reserve keeps their focus on the hard data and without a negative economic impact a rate cut might not be in sight, which is positive for the Greenback. A slight rise in consumer prices could hence be of support after the long streak of weaker prices. The data will be released on Wednesday, the 11th of June at 14:30 CET.

– US consumer sentiment– The index is an important soft- factor for the general economy in the US. It has been in a steady downtrend in the past months indicating that the personal finances as well as stagnating incomes leave a burden for the society. Concerns that prices for goods imported from China might not turn out to be extremely bad could help the index staying slightly in line with expectation at about 52.5.

S&P 500 weekly chart

The weekly chart of the S&P 500 index shows that the market is well on tack pushing towards the all- time- high. Especially the break above the small technical resistance zone, which has not been broken in the past three weeks shows that the positive sentiment has been fully resumed. A negative reading on the other hand might cause the market to slide again, though. The news will be released on Friday, 13th June at 16:00 CET.