Markets next week: Key things to watch out for

Summary

  1. Global markets under stress due to rising infections
  2. US, Eurozone growth numbers would be key drivers this week
  3. US Fed likely to keep monetary policy unchanged

The global equity markets were flat last week – primarily on back of mixed global cues. While COVID-19 took the sheen away from the markets, yet more than encouraging macro numbers from the some of the countries supported the markets.

Here is the list of four key events that will shape the global equity markets next week:

  1. COVID-19 Pandemic: The global pandemic, continuing its trajectory unabated last week. With more than 5.7 million fresh infections, and close to 90,000 death in last seven days, it has marked its worst weekly show since the onset of the pandemic in early 2020. The fears are that the latest surge may delay the global economic recovery by at least two quarters. With bleak estimates on COVID-19 tragectory, the global equity markets would be keenly watching out for the new infections across the globe.
  2. US growth numbers: The US is all set to announce its growth numbers for the first quarter of 2021. The numbers, which the US Bureau of Economic Analysis (BEA) would be releasing on 29 April 2021, are expected to show a faster economic expansion in the quarter ended March 2021, as against the previous quarter. The International Monetary Fund (IMF) expects the US economy to grow by 6.4% in 2021 – almost 400 basis point (bps) above the normal rate of growth it has shown in past few years.
  3. Federal Reserve Monetary Policy: A day before the US growth numbers would be announced, on 28 April, the American central bank – the US Federal Reserve (Fed) – would be announcing its monetary policy decision. The Board of Governors of Fed, that take this call, meets at intervals of five to eight weeks. The global markets are already discounting for a status quo in the American monetary policy.
  4. European GDP numbers: Eurostat would be coming up with the first quarter GDP numbers of the Eurozone. The Eurozone, along with the United Kingdom, witnessed lot of lockdowns in the first quarter due to the spike in fresh COVID-19 infections. The fund expects the Eurozone to grow by 4.4% this year.

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