Crispus Nyaga

Crispus Nyaga is a Nairobi-based trader and analyst. He started trading more than 7 years ago as a student. He has published in several reputable websites like The Street, Benzinga, and Seeking Alpha. He focuses mostly on G20 currencies, commodities like Crude oil and Gold, and European and American large-cap companies.

Last week marked the start of the fourth quarter of this year. As expected, the quarter’s first week was shaky, to say the least. In the United States, the bitter confirmation process of Brett Kavanough consumed most of the time for investors. They wanted to know whether the US president will have another victory. On Saturday, the senate voted along party lines to confirm the president’s appointee to the highest court of the land. In the same week, the emerging market problems continued while Italy’s budget proposal sent EU treasury yields rising. On Friday, the US released the jobs numbers which were lower than what traders were expecting. This article presents a few of this week’s key highlights.

No Major Economic Data

Unlike last week, there will be no major economic data this week. There will be no central bank meeting and no major data from the US. Today, the only significant data will be the Germany industrial data while on Tuesday, the only important data will be the small business confidence numbers. On Wednesday, traders will receive the GDP numbers and manufacturing number from the UK. On Thursday, the ECB will publish its minutes for the past meeting and on Frida, we will get trade data from China.

Three of the biggest US banks will release their earnings

On Friday, three of the biggest US banks will release their earnings. These banks are Wells Fargo, Citi, and JP Morgan will release their third quarter results. Traders expect this earnings season to continue showing better improvements in corporate profits just like in the previous season. They expect the Earnings Per Share (EPS) to rise by 19.2%. This may be an earnings growth of almost 20% for the third straight quarter.

Italy

Traders will potentially continue to focus on Italy this week. Last week, the country published its budget numbers that showed plans for increased government spending. Since Italy is the most indebted country in the EU, traders started worrying about future problems about debt. This led to a sharp increase in the yields of Europe’s treasury yields. This is because most people believe that Italy will likely have a debt crisis soon. They believe that it’s problems will be the next after those of Greece.

Brazil Election

This weekend, Brazilians went to vote. As expected, Jair Bolsonaro, a far-right candidate won the first round of elections. This led to fears that Brazil will face an uncertain future as it tries to emerge from a recession and as the struggle to fight corruption continues. He won more than 46% of the vote as Brazilians rejected the establishment candidates. This week, traders may pay a close attention to the Brazilian economy. Brazil is the eighth largest economy in the world with a GDP of $1.7 trillion.

Brexit

This week, Theresa May will continue to build consensus on the future of the country after Brexit. Today, Japan’s prime minister Abe said that the UK was ready to join the Trans-Pacific Partnership (TPP) after Brexit. The TPP was a plan under Obama to reign in on China by creating the largest free trade agreement.

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