Learn To Trade
 
Indicators & Chart Patterns

Deepen your knowledge of technical analysis indicators and hone your skills as a trader.

Find your detailed guides here
Trading Glossary

From beginners to experts, all traders need to know a wide range of technical terms. Let us be your guide.

Learn More
Knowledge Base

No matter your experience level, download our free trading guides and develop your skills.

Learn More
Learn To Trade

Trade smarter: boost your skills with our training resources.

Create a live account
Market Analysis
 
Market News

All the latest market news, with regular insights and analysis from our in-house experts

Learn More
Economic Calendar

Make sure you are ahead of every market move with our constantly updated economic calendar.

Learn More
Technical Analysis

Harness past market data to forecast price direction and anticipate market moves.

Learn More
Live Webinars

Boost your knowledge with our live, interactive webinars delivered by industry experts.

Register now
Market Analysis

Harness the market intelligence you need to build your trading strategies.

Create a live account
Partnership
 
Affiliate Programme

Grow your business and get rewarded. Find out more about our Affiliate Programme today.

Learn More
Money Manager

Increase your income and get compensated for your trading knowledge with ThinkInvest, putting you in control.

Learn More
API Trading

Create your own trading platform or data tools with our cutting-edge APIs.

Learn More
Introducing Broker

ThinkMarkets ensures high levels of client satisfaction with high client retention and conversion rates.

Learn More
White Label

We supply everything you need to create your own brand in the Forex industry.

Learn More
Regional Representatives

Partner with ThinkMarkets today to access full consulting services, promotional materials and your own budgets.

Learn More
Partnership

Plug into the next-gen platforms and the trades your clients want.

Create a live account
About ThinkMarkets
 
About Us

Find out more about ThinkMarkets, an established, multi-award winning global broker you can trust.

Learn More
Security of Funds

Security of your funds is our number one priority. Find out more about our insurance policy with Lloyd's of London.

Learn More
Trading Infrastructure

When it comes to the speed we execute your trades, no expense is spared. Find out more.

Learn More
ThinkMarkets News

Keep up to date with our latest company news and announcements.

Learn More
Contact Us

Our multilingual support team is here for you 24/7.

Learn More
About ThinkMarkets

Global presence, local expertise - find out what sets us apart.

Create a live account
Create account

Market update: Stocks mixed, dollar rebounds and oil extends recovery

Fawad Razaqzada Fawad Razaqzada 04/05/2021
Market update: Stocks mixed, dollar rebounds and oil extends recovery Market update: Stocks mixed, dollar rebounds and oil extends recovery
Market update: Stocks mixed, dollar rebounds and oil extends recovery Fawad Razaqzada
The markets have started May with a bit of volatility after yet another solid month for stocks and other risk assets in April. US equity indices have struggled for direction over the past few days, particularly the tech sector. European tech stocks have also struggled, while shares of travel firms have performed better after the EU announced plans to reopen its borders to tourists who have been fully inoculated against Covid-19. The news has also boosted crude oil, with Brent climbing above the $69 handle today. In another sign that it is not completely risk off, copper prices were holding their own relatively well too. Meanwhile, in FX, the US dollar has staged a bit of a recovery attempt, causing the EUR/USD to dip back to 1.20, while the USD/JPY has climbed above the 109 handle. The greenback has been supported in part by profit-taking after its consistent weakness in April until it found support on the last day of the month on Friday, when the Fed’s Kaplan said the central bank should start talking about tapering bond buying soon – contrary to what Chairman Powell had said earlier in the week.

Will the dollar recovery continue in the week ahead of will it once again fade? What about the stock markets – will it be a case of “sell in May and go away,” or will we continue to see strength for the markets as confidence grows further about the global economic recovery?

Thus far, the weakness in stocks and the rebound for the dollar have been mild. This is hardly surprising given the strong momentum behind the equity markets and abundant central bank support. The likes of the Fed and ECB have promised to keep their QE stimulus programmes running at full throttle despite signs of strong recovery in the US and some other parts of the world. The speeding up of Covid vaccinations in the Eurozone also helped to calm investor nerves. The US quarterly reporting season has been very good, too, so far. Although there has been signs of rising inflationary pressures, central banks have been almost unanimous in suggesting this will be transitory. Betting against the Fed has never worked, and speculators will be wary of initiating short positions even if valuations have gone through the roof.
 
Indeed, as global lockdown measures are slowly easing further, things will hopefully return to more normal ways in the coming months. Obviously, the situation in India is a big concern, but with many parts of the world now in a much better position to slow the spread of the virus and with Covid vaccines being rolled out, the markets may not show too much concern.

Economic growth in the US, UK and EU are likely to accelerate and inflation will probably heat up. Investors have been pricing this in by pushing bond yields higher. Small and steady rise in yields will not scare the stock market bulls, but if they start to accelerate to the upside then it would suggest that growth optimism is being replaced by worries over inflation. So far this hasn’t been the case, but it is worth watching the yields closely, nonetheless.
 
Recap of macro events so far this week

The week ahead is filled with plenty of more macro data and we have the Bank of England’s policy meeting to look forward to, while company earnings will continue to pour in with Pfizer expected to post results today. China and Japan will remain shut until and including Wednesday for public holidays. On Monday, the US ISM manufacturing PMI disappointed and its employment component fell, although prices paid rose in another sign of rising inflationary pressures. Overnight, the Reserve Bank of Australia kept its monetary policy unchanged and despite rising commodity and house prices said it may extend its asset purchases into 2022.

Looking Ahead

We will get more indicators for nonfarm payrolls report on Wednesday as ADP and employment component of the ISM Services PMI are released. On Thursday, the Bank of England will take centre stage, while Friday will see the release of monthly jobs reports from both North American nations.

Here’s what’s in store for the rest of the week:

Wednesday
  • New Zealand employment data
  • Euro zone final services PMIs, flash for Italy and Spain
  • US ADP private payrolls and ISM services PMI
  • Earnings: Pfizer and GM
Thursday
  • German factory orders and Eurozone retail sales
  • Bank of England policy decision
  • Earnings: Societe Generale, ING, Next, Barratt,
 
Friday
  • Chinese trade balance Caixin services PMI
  • German industrial production
  • US nonfarm payrolls
  • Canadian employment report
  • Earnings: Credit Agricole and IAG
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.

Learn more to earn more

our Education center

Related articles:

Week Ahead: May 10, 2021

By Fawad Razaqzada

10/05/2021

NFP Preview

By Fawad Razaqzada

07/05/2021

Market update: Gold breaks out and Dow hits n...

By Fawad Razaqzada

06/05/2021

Could BoE trigger break of GBP/USD 1.4 handle?

By Fawad Razaqzada

06/05/2021

Markets bounce back after tech rout

By Fawad Razaqzada

05/05/2021

Meet our contributors
Fawad Razaqzada
×
Fawad Razaqzada
Market Analyst, London

Fawad is an experienced analyst and economist having been involved in the financial markets since 2010, producing market commentary and research for a number of global FX, CFD and Spread Betting brokerage firms. He leverages years of market knowledge to provide retail and professional traders worldwide with succinct fundamental & technical analysis. Fawad also offers trading education to help shorten the learning curves of developing traders.
 
His colleagues consider him an expert at reading price action on the charts. This together with his deep understanding of economics and fundamental analysis, and trading experience, puts him in a great position to forecast short term price movements. Fawad covers a wide range of markets, including FX, commodities, stock indices and cryptocurrencies and his comments are regularly quoted by the leading financial publications such as Reuters and Market Watch. In addition to ThinkMarkets, Fawad also provides analysis and premium trade signals on his own website at TradingCandles.com.
 
 

Carl Capolingua
×
Carl Capolingua
Market Analyst, Melbourne

Carl has over 20 years' experience in financial markets and has held senior analyst roles at a number of financial institutions. Specialising in Australian and US stock markets in particular, Carl uses a top-down approach to assess the global macro picture before using both technical and fundamental techniques to select stocks. He regularly appears as an expert commentator on a number of media outlets throughout the Asia-Pacific region.
 
 
 

Kearabilwe
×
Kearabilwe Nonyana
Market Analyst, South Africa

Kearabilwe is an experienced Sales trader and Analyst specialising in Equity and Equity derivatives. His career in the financial markets has seen him hold various positions in global investment banks and global CFD and Spread betting firms. He has deep interest in using quantitative methods to help him understand and teach the fundamental drivers of asset prices.
 
 
 

Fawad Razaqzada
Fawad Razaqzada
Fawad is an experienced analyst and economist having been involved in the financial markets since 2010, producing market commentary and research for a number of global FX, CFD and Spread Betting brokerage firms.
Carl Capolingua
Carl Capolingua
Carl has over 20 years' experience in financial markets and has held senior analyst roles at a number of financial institutions.
Kearabilwe
Kearabilwe Nonyana
Kearabilwe is an experienced Sales trader and Analyst specialising in Equity and Equity derivatives.

Feel confident?

Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Back to top