THE DAY AHEAD: TOP 3 THINGS TO WATCH
BOREX INVETORS BUZZ TOP 3 THINGS Here’s a preview of the top 3 things that could rock markets tomorrow
Earnings from banks kick off session
Three of the four biggest US banks — JPMorgan Chase, Citigroup and Wells Fargo — kick off the US session with the release of second-quarter earnings before US markets open.
Anticipating a mixed set of results, Wall Street analysts have cut their profit forecast in recent weeks.
Analysts forecast a drop of around 15% across the big five US banks’ fixed income, currencies, and commodities (FICC) businesses, amid a drop in market volatility.
Returns from loans and other assets are expected to show an improvement but deal-making and stock market listing activity, a source of fees for banks, continues to be a concern amid policy uncertainty in the U.S.
TOP 3 THINGS
Baker Hughes rig count
The weekly instalment of drilling activity from Baker Hughes on Friday, will be closely watched by investors, after the number of drilling rigs dropped for the first time in twelve months in June.
The weekly rig count is an important barometer for the drilling industry and serves as a proxy for oil production and oil services demand.
At Thursday’s settlement price, crude futures remained on track to post a win for the week, despite growing investor disbelief in Opec and its allies’ ability to rein in the glut in the supply.
US macro data on tap
Inflation and retail sales data are expected to be closely monitored by investors to gauge the strength of the U.S. economy amid concerns from Fed officials that interest rate increases could be curbed should the pace of inflation continue to slow.
On Wednesday, wholesale inflation, measured by producer price index rose 0.1% in June, missing expectations of a 0.2% rise.
The soft inflation data weighed on the dollar, which slipped to session lows against its rivals, increasing demand for dollar-denominated gold.
Dollar-denominated assets such as gold are sensitive to moves in the dollar – A dip in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand.