Today's earnings day, with projections expected weaker, which could hurt stock markets, while Q1 revenue could be higher due to stockpiling.Skerdian

Quick overview
- Today’s earnings day could see weaker projections impacting stock markets, while Q1 revenue may rise due to stockpiling.
- The European Central Bank’s initial statement led to a euro selloff, but President Lagarde’s remarks shifted focus towards potential future rate cuts.
- Despite a brief dip, the euro rebounded as the US dollar weakened, influenced by poor economic data from the Philadelphia Fed.
- Gold prices surged to an all-time high amid a declining dollar and geopolitical tensions, while Bitcoin experienced volatility but recovered to around $85K.
Today’s earnings day, with projections expected weaker, which could hurt stock markets, while Q1 revenue could be higher due to stockpiling, so both sides are at risk for Dow Jones and stock markets.
The European Central Bank took center stage early in the trading day, prompting a brief selloff in the euro as investors initially interpreted the statement as highlighting downside risks. However, ECB President Christine Lagarde soon re-framed the messaging during her remarks, emphasizing tightening financial conditions—potentially laying the groundwork for future rate cuts. Although the central bank removed language suggesting it remained in “restrictive” territory, post-meeting leaks added fuel to speculation, hinting at a likely rate cut in June. The market now prices in a 75% chance of such a move.
Despite this, the euro’s weakness was short-lived. EUR/USD dipped to a session low of 1.1335 immediately after the decision but rebounded quickly, erasing its 25-pip loss as the US dollar faced broad pressure. Particularly weak economic data from the Philadelphia Fed added to the dollar’s decline, with its new orders component falling to levels typically seen during crises—sparking worry in the US freight sector over declining shipment volumes. By the end of US trade, EUR/USD had settled around 1.1367, largely flat on the day.
US Dollar Slides, Commodities and Risk Assets React
Elsewhere, the US dollar came under broader pressure, especially against commodity-linked currencies. Speculation surrounding a possible replacement of Federal Reserve Chair Jerome Powell caught market attention, driving bids at the front end of the Treasury curve—though investors remain skeptical about the implications of such a change.
Trading momentum slowed into the afternoon ahead of the long US holiday weekend, a quiet tone that has carried over into the Asian session.
Today’s Market Outlook: UK and US Data in Focus Ahead of the Weekend
UK GDP Expected to Recover Slightly
All eyes will be on Friday’s UK GDP data, where economists expect a modest rebound: month-over-month growth of +0.1% in February, compared to January’s -0.1%. The three-month average is anticipated to rise to 0.4% from 0.2%. Capital Economics attributed the previous decline to statistical “payback” following an unusually strong December. This time, Investec expects stronger results, potentially boosted by a sharp rise in February retail sales, which could lift the headline figure above consensus expectations.
US Earnings Season Kicks Off With High Hopes
The Q1 earnings season begins in earnest on Friday, starting with major US banks. FactSet projects that S&P 500 companies will post year-over-year earnings growth of 7.3%. If realized, this would mark the seventh straight quarter of rising earnings. Still, the firm notes that earnings estimates have been revised downward across all 11 sectors compared to projections at the end of 2024. As always, forward guidance will be crucial in light of growing economic uncertainties and recent equity market weakness.
Last week, markets were chaotic, with gold soaring $250 in the final three days, the EUR/USD surging 5 cents, and stock markets opening down before turning upward. The moves were big, and the volatility was enormous, so we opened 40 trading signals in total, finishing the week with 25 winning signals and 15 losing ones.
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