Top 5 Market Trends to Watch Out for in the Week Ahead

As we embark on the second quarter of the year, the markets are set to experience an exciting week ahead. Investors are gearing up for the all-important US monthly jobs report, while central banks in Australia and New Zealand will deliver their latest interest rate decisions. Additionally, OPEC is expected to hold a virtual meeting, and equity markets are expected to remain volatile.

Here are the top five things to watch out for in the markets in the week ahead:

1. Nonfarm Payrolls Report On Friday, the nonfarm payrolls report is set to be released, which will provide an update on the labor market’s health. The US economy is expected to have added 238,000 jobs in March, following a gain of 311,000 in February. Furthermore, economists forecast that average hourly earnings would have increased at an annual rate of 4.3%, the slowest rate since July 2021.
2. Federal Reserve Updates The Federal Reserve officials have indicated that rates are likely to remain around current levels for the rest of the year to help combat inflation. The March employment report will be the last before the upcoming May meeting, with investors split over whether policymakers will raise rates one last time. An increase in jobs creation above 200,000 is likely to bolster expectations for a 25–basis point rate hike. Several Fed policymakers are due to make appearances during the week, including Cleveland Fed President Loretta Mester, St. Louis Fed President James Bullard, and Fed Governor Lisa Cook.

   

3. Other Economic Data Ahead of the March jobs report, the economic calendar includes reports on February job openings on Tuesday and March data on private sector hiring on Wednesday. ISM purchasing managers surveys of manufacturing and service sector activity are due out on Monday and Wednesday, respectively.
4. Equity Markets U.S. equity markets posted solid gains in the first quarter despite a steep selloff in bank stocks after the collapse of two regional banks sparked fears over a broader financial crisis. However, investors remain cautious, and some believe the gains leave stocks more vulnerable to an economic downturn. For stocks, “it means that we could be in for some very nasty surprises over the coming quarters.”
5. OPEC Meeting OPEC+ is expected to stick to its existing deal to cut oil output at a meeting on Monday. Falling oil prices are a problem for most OPEC+ members because their economies rely heavily on oil revenue. After the talks, the next full OPEC+ meeting is not until June.

RBA and RBNZ Interest Rate Decisions The Reserve Bank of Australia is set to meet on Tuesday, and the decision on whether to hike or hold rates is on a knife-edge. The Reserve Bank of New Zealand is also expected to hold a meeting on Wednesday, with markets still betting on another 25-basis point rate hike.

In conclusion, the week ahead promises to be an eventful one for the markets. With the release of the nonfarm payrolls report, updates from the Federal Reserve, other economic data, the equity markets, and the OPEC meeting, there is a lot to watch out for. Investors need to remain vigilant and make informed decisions based on the latest market trends.