Key events to watch in the week ahead: 24-28 April 2023
As the US earnings kicks into high gear, what are some of the key events to watch next week?
This week’s overview
The US earnings season has been lined with hits and misses thus far, forcing some indecision for the major US indices over the past two weeks. Growth fears have kept risk sentiments in check, but it may take a breakdown of the indices’ respective April lows to provide greater conviction that a wider retracement is in place. Heading into the new week, here are some of the key events to watch:
24-28 April 2023: US earnings season
The US earnings will shift into higher gear next week, with notable earning releases out of several big tech companies (Alphabet, Microsoft, Meta Platforms, Amazon.com), which have a significant weightage in the broader indices.
Thus far, beaten-down expectations have allowed room for some positive surprises. Out of the 17% of S&P 500 companies which have reported their results, 76% have surpassed earnings expectations. That said, outlook will be the key focus as well, with downside risks to growth suggesting that earnings will continue to remain under pressure, without the worst in sight.
With the S&P 500 and Nasdaq locked within a period of indecision, the big tech earnings will be a key catalyst to determine if a new higher high can be established next week.
26 April 2023 (Wednesday, 9.30am SGT): Australia’s Q1 inflation rate
The recent minutes from the Reserve Bank of Australia (RBA) have delivered a hawkish takeaway, with the prospects of further rate hikes being discussed by policymakers before eventually settling with a pause. That signalled some intention for further adjustment in rates into restrictive territory if inflation were to surprise to the upside.
Current expectations are for Australia’s Q1 inflation rate to turn in at 6.9% year-on-year, down from the previous quarter’s 7.8%. An upside inflation surprise to indicate some pricing persistence is likely to build the case for another 25 basis-point hike from the RBA in May.
With the AUD/USD trading within its near-term ascending channel pattern on the four-hour chart, much will depend on whether the 0.678 resistance level may be broken ahead. Any subsequent move above the 0.678 level could pave the way to retest the 0.691 level next.
27 April 2023 (Thursday, 8.30pm SGT): US Q1 GDP growth rate (Advance estimate)
The advance estimate for US Q1 gross domestic products (GDP) growth rate is expected to reveal the initial impact from the recent banking fallout, which will be looked upon to guide expectations of a soft landing in the US economy. The current consensus is for a 2% growth from the previous quarter, down from 2.6% in Q4 2022.
A lower-than-expected read is likely to translate into wider growth concerns for the US economy, at a time where recent US growth data has been surprising to the downside. A look at the US economic surprise index has revealed a sharp decline over the past one month.
28 April 2023 (Friday, 11.00am SGT): Bank of Japan (BoJ) interest rate decision
The lack of any upside inflation surprise over the past five months seems to provide some justification for the BoJ to stand pat on its policy for now, as rate expectations were not pricing for any hike over the next four meetings. The new Governor has also been repeating that he expects inflation to drop from around September/October, so that could point towards some wait-and-see until then.
The USD/JPY (大口） will be in focus, having recently formed a new higher low while a reversion in moving average convergence/divergence (MACD) to positive territory suggests building upward momentum. That said, much resistance lies ahead, which includes its key 200-day moving average (MA) and the 138.00 horizontal resistance. These must be overcome to establish a renewed uptrend. Narrowing yield differentials between Japan and US 10-year government bonds will be a weighing factor to restrict further upside as well.
28 April 2023 (Friday, 8.30pm SGT): US core PCE price index
With the core Personal Consumption Expenditures (PCE) index being the Federal Reserves’ (Fed) preferred inflation measure, the data will determine if the Fed has the room to signal for an impending rate pause at the May meeting. Consensus is for the index to turn in a 4.6% year-on-year increase, unchanged from the previous month.
While expectations are priced for a 25 basis-point hike in the upcoming Fed meeting, any upside surprise in the inflation data could potentially open the door for another rate hike in June. Any need for further hawkish recalibration in rate expectations will likely provide support for the US dollar, while keeping risk sentiments on a more downbeat tone.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Act on share opportunities today
Go long or short on thousands of international stocks with spread bets and CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.