Monday 17 May 2021 2:04 pm

City A.M. TV: Market Snapshot

Markets took a tumble last week.

That primarily occurred on Tuesday in Europe as the key UK equity indices as well as the key Eurozone ones pulled back. In the US on Tuesday the S&P500 posted a bearish key day reversal (a troubling technical price pattern), while its price weakness then continued on Wednesday as the US’s inflation data caused markets to sell off again. After Thursday and Friday’s recovery rallies, the key question now, though, is: Where next? In that respect, in today’s video we examine the question of whether or not Bitcoin provides any insight into the global equity market direction. And if so, why? In particular given Bitcoin has been weak over the past 24 hours and is currently trading at the bottom end of its multi month range, a break below that level could prove to be a key piece of information for equity index futures traders.

Key events this week are multiple and include a focus on inflation data, with both the UK and the eurozone publishing their April inflation data this Wednesday. Elsewhere flash PMI estimates for the manufacturing and service sectors on Friday will be a key focus (as they represent the first take on global economic activity for May). Equally South Korean (20 days of) May trade data (also published on Friday) will help build up that picture of global economic activity in May. South Korea is a key global exporter of goods, hence why its data is watched so closely. In the US, meanwhile, there’s a focus on housing data (NAHB homebuilders index on Monday; housing starts and permits on Tuesday; & existing home sales on Friday) coupled with a focus on retail company earnings, kicking off with Walmart & Home Depot on Tuesday.

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