This week, strong results from the US banking sector boosted the US2000 index of smaller companies and reinforced investors' hopes for a non-recessionary scenario of monetary policy easing by the Fed. Next week, investors await another round of quarterly reports, as well as preliminary PMI reports for October and speeches by central bank representatives. Therefore, it will be worth watching the US500, EURUSD, and Bitcoin.
US500
US indices are trading at historic highs, and so far, strong corporate quarterly reports have not raised major concerns. Currently, the market assumes that the US economy will manage to navigate the period of higher interest rates without causing a deeper recession. Next week, we will see even more important reports, including from Amazon, Tesla, Coca-Cola, GE, and SAP. Strong outlooks following the results could fuel further growth, while disappointing results may serve as a catalyst for a market correction. Therefore, it's worth monitoring the US500 index.
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Sentiment in the US stock market will certainly also affect the dollar, which has been extremely strong lately. Additionally, we will also get preliminary PMI data from France, Germany, and the Eurozone. On Tuesday and Wednesday, ECB members, including President Lagarde, will deliver speeches. These events could impact the recently highly volatile EURUSD currency pair.
In line with improved sentiment in traditional markets, we are also seeing better moods in the cryptocurrency market. Bitcoin gained strongly last week, breaking above key resistance levels. The rise in Bitcoin was supported by bullish comments from the founder of the world's largest investment company, BlackRock, and the increased probability of a pro-cryptocurrency candidate—Donald Trump—winning the presidency. Sustained positive sentiment could push Bitcoin's price higher, toward $70,000. However, any negative surprises could trigger a correction, and hence making Bitcoin's price worth monitoring.
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