As crucial meetings with significant geopolitical importance approach, global investors and traders will be on edge for important clues. Later this week, South Korean and North Korean leaders will meet with a bid to resolve the decades’ old long war.
The two countries have been in a technical war for more than 50 years. This is because, after the Korean war ended, the two countries have never signed the documents to formally end the war. In preparation for the important meeting, the two countries ended the broadcast of propaganda in the border. In addition, North Korea has promised to end its nuclear tests and shut down the production facilities.
The meeting will come weeks before the highly anticipated one between Kim Jong Un and Donald Trump. Already, the CIA director, who has also been appointed the Secretary of State has travelled and met with the Korean leader. A good resolution for the North Korean conflict will be a good thing for the world, which may have lower chances of a major war.
This week, the focus may continue being on the earnings season with major companies expected to report. Last week, major banks released their reports, crashing what analysts were expecting. This week, the focus will be on technology stocks. The major companies expected to report are: Google, Amazon, Twitter, eBay, SAP. Other major companies expected to report are: 3M, Boeing, Lockheed Martin, Haliburton, AT&T, and Comcast among others. For traders who focus on stocks, this will therefore be a major week.
Traders may also focus on the oil market. Last week, Saudi Arabia reiterated on the need to support the oil market by reducing output. With the commodity now trading at more than $70 a barrel, there is a likelihood that traders will be paying close attention to it. Last week also, Trump expressed his thoughts on the oil prices, accusing OPEC of colluding to raise prices. In the previous rally in 2012, he expressed similar thoughts.
For the US, times have changed. In the previous rally, most shale oil producers were just getting started. Their production costs were high and America was simply not producing enough. Today, the US is producing more than 10.3 million barrels of oil per day. Therefore, higher oil prices will not necessarily be bad for the country.
Politics will continue to dominate the news this week. The Mueller investigation is ongoing and with major news coming out every day, traders will pay close attention to them.
From the data side, we will receive several key information. Today, we will receive the PMI data from Germany and home sales in the US. Tomorrow, we will receive the inflation data from Australia, Germany’s business climate, US home sales, and consumer confidence. On Thursday, we will receive the interest rate decision from the ECB and on Friday, we will receive the statement from the Bank of Japan.