Market turbulence may continue this week, with a number of important events expected
US equity markets closed last week on a lacklustre note, with all of the three main indices ending the week in the red.
The S&P 500 fell 1.5% for the week, although it closed up 0.13% on Thursday's final trading day, the Easter holiday.
The Nasdaq also lost 2% for the week, while the Dow Jones suffered a weekly decline of over 2%, particularly due to a 22% plunge in UnitedHealth, which reported a weak flash report.
The tech sector was also under pressure, especially Nvidia, which fell nearly 10% in two days. The company announced a $5.5 billion cost due to restrictions on GPU exports to China.
Markets continue to be dominated by trade policy uncertainties. US President Donald Trump said an agreement with China and the EU was expected, but investor confidence wavered after Fed chair Jerome Powell warned that Trump's tariff measures could increase inflation in the short term.
The S&P 500 has fallen nearly 7% since the beginning of April, a good indication of the extent of market concerns.
European equity markets ended the day almost flat on Thursday after modest losses, as the European Central Bank cut its benchmark interest rate by 25 basis points, as expected. The rate cut comes amid weak economic prospects in the eurozone and global trade uncertainties.
The Stoxx 600 index slipped just 0.1%, while London's FTSE 100 was little changed. The German DAX and the French CAC 40 lost half a percent.
Corporate news was mixed, with Siemens Energy's share price jumping 10% after it improved its 2025 financial forecast. In contrast, Hermès fell 3.2% as the luxury fashion house slightly missed sales expectations - despite overtaking LVMH this week to become the world's largest luxury company by market capitalisation.
Lousy week for the dollar
The euro remains strong against the dollar, with the exchange rate going up from last week's opening level of 1.1325 to 1.1394. The level of 1.14 seems to be a major resistance, if the exchange rate moves above this level the euro could strengthen above the 1.15 band.
On Friday, although trading was more subdued due to the Easter holiday, there were still substantial movements in the foreign exchange market. The US dollar weakened, particularly against the Swiss franc, with the USD/CHF exchange rate falling another 35 points. The exchange rate remains near its ten-year low and there are no signs of a major reversal for the time being.
Market attention is now focused on the US trade negotiations. There could be progress in talks with China or the EU over the long weekend, which could give the dollar a new direction next week.
The forint strengthened significantly against the dollar last week, correcting from around 360 to 357.75.
It also improved against the euro last week, coming down to 407.63 from a range of 410-411.
What's coming up this week?
On Monday, macroeconomic life had not yet started, the Budapest Stock Exchange was closed for the holiday, as was the DAX. In the United States, the Conference Board's economic sentiment index was published, which indicates the confidence of the corporate sector in the future.
On Tuesday, the focus will be on the IMF's global economic forecast, which could affect the outlook for the world economy as a whole. Also of note will be the publication of economic sentiment indices from the US and the eurozone.
On Wednesday, a succession of fresh PMI data from Japan, Germany, the euro area and the US will provide a snapshot of sentiment in the manufacturing and services sectors. In the evening, the US Fed publishes its Beige Book, which presents regional economic trends and could foreshadow the Fed's next steps.
On Thursday, we will see detailed public finance data in Hungary, while internationally, important German and US indicators are due: in particular, the Ifo business sentiment index and US durable goods orders data could have an impact on markets.
On Friday, several domestic statistics will be published: the Hungarian Central Statistical Office (KSH) will release employment and unemployment data, as well as vital events statistics, while the National Bank of Hungary's (MNB) house price index will show housing market trends. Abroad, in the US, the development of the Michigan index will be of interest, as it is one of the most important indicators of consumer sentiment.
On Sunday, Chinese industrial companies will release their earnings data, which could give an important indication of the state of the world's second largest economy, especially the outlook for the manufacturing sector.
Cover photo (for illustration purposes only): Getty Images
