Week Ahead 20/02/23: ZEW; Ifo; UK GfK and earnings from HSBC, Lloyds, NVIDIA, eBay

Trade ideas

I'm Angeline Ong and welcome to your week ahead. Plenty of trading opportunities in the form of consumer manufacturing and services data from Germany and the euro zone as a whole. We have the ZEW out on Tuesday followed by the Ifo on Wednesday and then fourth quarter US GDP and the UK GfK consumer confidence data on Friday.

FX focus

Currencies, especially the EUR/USD could be a big move along with the dollar given the risk aversion we're seeing in play on Friday due to concerns of stickier inflation and therefore, giving the Fed more ammunition to keep pushing rates higher. Now, we also have the Fed minutes in the week ahead. Here to discuss a key trade hanging off that is IG's Axel Rudolph.

Axel's key trade

Angeline, I find that on Wednesday we've got the US Fed minutes and that's really important because it will basically give us a good indication of where the Fed is heading with regards to its next rate hike and whether that will be 25 basis points or perhaps 50 basis points. This is key since several Fed committee members have come out this week indicating that they would actually support a 50-basis point rate hike on the base of those stronger than expected US producer price inflation data and also unemployment data. With regards to the US Fed minutes on Wednesday, I'd like to look at the NASDAQ. What we can see is that we have now fallen through the 2023 uptrend line and also formed a bearish engulfing pattern on the daily candlestick chart, both of which is actually short term negative and may indicate that we are forming a top with regards to the US Tech 100 because after all, we've just basically fell short again this week, just like last week off the highs, which were made between September and early February. So, in September last year, 12,902 and 12,896 just a few weeks ago this year. So basically, what this means, from a technical perspective, is that if we were to fall through last week's low at 12,203, we would be in a consolidation phase and have formed a minor top, taking us back down again, probably towards the mid-November high, 12,084, perhaps even to the 200-day simple moving average at 11,894. So, with regards to the NASDAQ 100, it will be interesting to see whether we will see follow through on that next week with the US Fed minutes.

Corporate results

Earnings also in focus in the week ahead. The deluge is calming down a little. From the US, we have a tech and consumer theme with quarterly numbers out from Home Depot Inc (All Sessions), Walmart Inc (All Sessions) and eBay Inc (All Sessions).