Top 5 influential factors on the markets to watch this week

Investing.com – After a week dominated by the escalation of trade tensions between the United States and China, the trade war is likely to remain the centre of investors ‘ concerns, but this week will also forward the minutes of the u.s. Federal Reserve, the profits of retailers in the US and economic data, as well as the european elections.

Here’s what you need to know to start your week.

The trade tensions will remain a central theme in the markets this week, while concerns about the prospects for global economic growth are of increasing concern as the trade war between the United States and China becomes more acrimonious.

“The trade will remain the main driver of market movements in the next week, with the intensification of the tensions which reinforce the concerns of the market regarding the future prospects of the global economy. We see no reason to be optimistic in the short term, because the market should look to the G20 summit in June, where the president Trump is expected to meet with president Xi to discuss the situation,” said ING (AS:INGA) on Friday.

The United States has attenuated the escalation of the trade war on the fronts in europe and japan, delaying the customs duties on automobile imports, but the threat of tariffs still remains on the table.

The minutes of the meeting of the Federal Reserve on may 1, scheduled Wednesday, will provide an overview of the debate of the leaders before voting in favour of maintaining interest rates.

During the press conference that followed the meeting, Fed chairman Jerome Powell, stated that he saw no valid reason to change the interest rates in both directions.

But in a context of low inflation and economic uncertainty, some decision makers of the Fed have indicated that they may lower interest rates if inflation was not progressing.

At the same time, the presidents of the Richmond Fed, Boston and Minneapolis have expressed their concern regarding the question of whether a trade conflict extended to the detriment of economy might require a policy response.

President Powell, vice-chairman of the Fed, Richard Clarida, the president of the New York Fed, John Williams, and the president of the Fed of St Louis, James Bullard, are part of the representatives of the central bank who will speak this week.

A new series of economic data will be monitored closely at a time when markets are trying to measure the impact of the trade conflict over growth prospects, both in the United States than in the whole of the global economy.

The United States must publish reports on durable goods orders and data on existing home sales and new.

The euro zone will publish preliminary data on private sector activity survey and the German Ifo will also be at the centre of concerns, investors are looking for signs of stronger growth in the second quarter. The data on british inflation and a report on canadian retail sales will also be published this week.

After an unexpected fall in retail sales in the u.s. last month, investors will analyze the results of Home Depot (NYSE: HD), Lowe’s (NYSE: LOW), Kohls (NYSE: KSS), Nordstrom (NYSE: JWN) and Target (NYSE: TGT) for what they have to say about the economic outlook. JC Penney (NYSE: JCP), and TJX (NYSE: TJX) will also make updates of the results.

Reports on the profits of Walmart (NYSE: NYSE:WMT) and macy’s (NYSE: M) have already enabled the market to come back down to earth last week. While the earnings exceeded forecasts, the two retailers have warned of lower sales and higher prices because of trade tensions, US-China.

The warnings are also contrary to the assertion of president Donald Trump, according to which China was going to pay the rate increases, and not the american consumer.

The citizens of the European Union will go to the polls on 23 may to elect lawmakers to the European Parliament, which could prove to be a decisive moment for the “project Europe”.

The political parties of eurosceptics are widely expected to be in force, which could hinder the approval of the next president and the next budget of the European Commission.

A defeat for british Conservatives could accelerate the output of the First minister Theresa May and increase the chances of Brexit ” without agreement “. A strong performance for the League Italian could encourage Salvini to dissolve the coalition government and call new elections.

A result better than expected for the far-right will be a bad news for the euro and the pound sterling.

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