Earnings to Set the Tone in Financial Markets This Week

Posted Monday, October 17, 2022 by
Skerdian Meta • 2 min read

Will earnings meet forecasts?

Last week we had the US PPI (producer price index) and the CPI (consumer price index) reports being released on Wednesday and Thursday respectively, which offered volatility in the financial markets. Both reports came above expectations, which sent the USD higher at first, but then we saw a quick reversal and the USD fell more than 150 pips lower, while stock markets surged higher.

Things have calmed now and it seems like the USD buyers are returning again, although this week is going to offer some volatility as well, and we don’t know in which direction yet. The economic calendar from the US is light, but the earnings reports from major corporations which will be released throughout the week will likely impact the US and broader markets. After last week’s consumer inflation report, the odds of a 75 bps (basis points) rate hike from the FED surged and this is a done deal, but markets are worried about the post-November 2 hikes.

The earnings reports this week will offer an insight into how the corporations are doing. If earnings are low, the odds of smaller hikes in the following meetings will increase and the odds of higher hikes will decrease, which will be negative for the USD. Higher earnings will mean that the economy can still hold strong hikes, which will be a positive event. Below are the important releases: