CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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
Special Reports

Engaging, in-depth macroeconomic analysis and expert educational content from our in-house analysts

Learn more
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
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.

Partner Portal
About ThinkMarkets
 
Sponsorships

Check out our sponsorships with global institutions and athletes, built on shared values of excellence.

Learn more
About Us

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

Learn more
Careers

Discover a range of rewarding career possibilities across the globe

Apply now
Security of Funds

Security of your funds is our number one priority. We safeguard our Client funds in top tier banks.

Learn more
ThinkMarkets News

Keep up to date with our latest company news and announcements

Learn more
Trading Infrastructure

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

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
Log in Create account

Week Ahead: 25 October 2021

Fawad Razaqzada Fawad Razaqzada 22/10/2021
Week Ahead: 25 October 2021 Week Ahead: 25 October 2021
Week Ahead: 25 October 2021 Fawad Razaqzada
  • Stocks: S&P at records amid reflation trade and positive earnings
  • Techs in focus ahead of busy earnings week
  • Gold breaks out above 200-day
  • Central banks: ECB and BOJ inaction, BOC likely to taper QE further
Sentiment remained overall positive towards risk assets once again throughout much of this week, due, in part, to mostly better-than-expected earnings, ahead of a busy next week, and as Evergrande China narrowly avoided default. The S&P 500 hit a new record high, as too did Bitcoin, while the Turkish Lira slumped to a fresh low on Turkey’s bizarre policy response to surging inflation. The dollar weakened most notably against commodity dollars, as well as the Chinese Yuan and Russian Ruble. News that Evergrande has avoided a default for now, provided the Renminbi relief and supported global stock markets on Friday. The Rubel surged, driving the USD/RUB momentarily to below 70.00, following a larger-than-expected rate hike by Russia’s central bank on Friday. The Dollar Index fell but remained trapped between 93.50 support and 94.00 resistance.  Crude oil held near multi-year highs, while gold edged higher, and silver rose for the fourth consecutive week, even as yields on US 10-year bonds climbed higher.
 

Looking Ahead

 
Looking ahead to the wee ahead, central banks and tech earnings will take centre stage, while on the economic data front, there is not much on the agenda until the US GDP data is published on Thursday (see the economic calendar below, for more). Judging by the ongoing risk-on sentiment, we might see some further follow-through in risk-taking in the early parts of this week. Whether the markets will be able to kick on from there will depend, in part, by the outcome of the US technology sector earnings that will be released throughout the week (see below for more).
 

Precious metals shine

 
Away from earnings, reflation trade is the dominant theme given the rallying commodity dollars and equities in the face of rising inflation. Investors – judging by their collective actions as reflected in price on the global markets – reckon that a prolonged period of above-trend inflation, combined with weaker economic growth, is not very likely as the impact of temporary factors and supply bottlenecks are likely to subside in the not-too-distant future.

 
As such, the markets probably don’t expect central banks to tighten their policies meaningfully anyway – something that the Fed, BoE and others have indicated. This is something that the ECB, BOC and BOJ will all echo as well in the week ahead. Central banks wouldn’t want to choke off economic growth by being too aggressive when they tighten their policies especially as there have been some signs of weakening recovery of late.

This partly explains why the gold-silver ratio has dropped, with silver, being more of an industrial material has been able to shine more brightly of late, despite 10-year bond yields having remained elevated near their recent highs. But gold has also broken out above key resistance the 200-day average around $1800.

Figure 1: Gold daily chart
GoldSource: ThinkMarkets and TradingView.com

If the breakout can be sustained, we might see the yellow metal come back more meaningfully.
 

Techs in focus

 
It is a big week for technology stocks. We will hear from the likes of Alphabet, Apple, Amazon, eBay, Facebook, Microsoft. Heading into arguably the most important week of the earnings season, investors are expecting to hear decent numbers from these tech giants. The earnings season has started quite strongly with Wall Street banks producing results that beat expectations previously, while this week saw the likes of Netflix and Tesla shares reach for new highs following upbeat numbers. 

So far, positive earnings have kept the markets supported. However, the key risk is that the global supply chain bottlenecks and surging prices might prove to be a much bigger issue than expected, something which could hurt fourth quarter revenue and profits.

Company CEOs have not been shy discussing these matters abundantly in their earnings calls or reports. Apple, for one, is already expected to slash its projected iPhone 13 production targets for 2021 by a growing number of analysts. The prolonged chip shortage could see Apple miss as many as 10 million units of its flagship iPhone 13, which could ultimately hit its shares. Meanwhile corporates may have been forced to slash their ads campaigns, which could be particularly bad news for social media platforms like Facebook and Twitter and Google.  If Snap Inc is anything to go by then then the fourth quarter results could be weak as companies spend less on ads in the current quarter due to supply issues and other reasons.

So, as well as keeping a close eye on Q3 earnings, watch out for any major warnings about Q4 numbers by major companies reporting this week.  
 

Data and earnings highlights

 
  • Monday and Tuesday will be dominated by earnings as the macro calendar is quiet.  Facebook earnings will come out on Monday after the close, while on Tuesday we will hear from the likes of Alphabet, Microsoft, Twitter, AMD, Visa, GE, UPS among many others.
 
  • Wednesday will see the release of inflation figures from Australia, followed by BOC’s rate decision where the North American central bank is expected to slash QE by C$1bn from the current C$2bn per week. On the earnings front, we will hear from the likes of eBay, Ford, Boeing, McDonalds, Coca-Cola, GM
 
  • Thursday will see the release of US Advance GDP, while both the Bank of Japan and the European Central Bank will make decisions – likely to be inaction – on monetary policy.  We will also have earnings from Apple, Amazon, Mastercard and Starbucks.
 
  • Friday morning will be dominated by Eurozone data, including German and French GDP estimates; Eurozone CPI and German retail sales, then in the second half of the day we will have US Core PCE Price Index, as well as earnings from Exxon Mobil, Chevron, AbbVie and others.
 
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.
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