Nvidia, the leader in artificial intelligence, delivers record financial results in Q2 2024, with net profit up 168 per cent year-on-year. Despite this, the share price is down 6 per cent, suggesting that high investor expectations are triggering a reaction along the lines of ‘buy the rumours, sell the facts’. Although the current valuation of the stock seems appropriate, the market has reacted with a discount that may be a correction of earlier expectations. The company continues to cement its solidity, highlighted by an increase in its share buyback programme. The decline in Nvidia shares did not have a significant impact on the major indices. The US S&P 500 ended the week up 0.4 per cent, while the technology Nasdaq 100 fell 0.9 per cent. With each week, we move closer to historic highs. In the coming week, we will learn about interest rate decisions in Poland and Canada. However, investors' special attention is directed towards Friday's Eurozone GDP reading for the second quarter of this year and the US unemployment rate data. In particular, statistics from the US labour market could be crucial for currency quotations. After all, the latest reading crossed (according to Sahm's economic rule) the threshold that has often heralded the onset of a recession, as evidenced by data from the past 50 years.
Table of contents:
- Interest rate decision in Poland
- Interest rate decision in Canada
- Eurozone gross domestic product (GDP) quarterly (Q2).
- US unemployment rate (August)
Wednesday, 4.09, 15:00 CET, interest rate decision in Poland
The National Bank of Poland kept interest rates unchanged at 5.75 per cent for the ninth consecutive meeting in July. In August, the inflation rate rose to 4.3 per cent, exceeding the inflation target, which is in the range of 1.5-3.5 per cent. As a result, NBP President Adam Glapinski rejected the possibility of interest rate cuts this year.
Analysts' consensus is for no change in NBP interest rates.
Source: Tradingeconomics.com
A higher-than-expected interest rate could be bullish for the PLN, while a lower-than-expected interest rate could act bearishly on the PLN.
Impact: EUR/PLN, USD/PLN, GBP/PLN
Wednesday, 4.09, 15:45 CET, interest rate decision in Canada
The Bank of Canada began a cycle of interest rate cuts in June, reducing the main rate by 25 bps and then again in July, to 4.5 per cent. The decision follows an oversupply in the economy, which has slowed inflation significantly. The Bank of Canada expects CPI inflation to fall further by the end of the year, and to stabilise at 2 per cent in 2025.
Analysts' consensus is for interest rates to be cut to 4.25 per cent.
Source: Tradingeconomics.com
A higher-than-expected interest rate could be bullish for CAD, while a lower-than-expected interest rate could act bearishly on CAD.
Impact: USD/CAD, EUR/CAD
Friday, 6.09, 11:00 CET, Eurozone gross domestic product (GDP) quarterly (Q2).
According to preliminary data, Eurozone GDP grew by 0.6 per cent year-on-year in Q2 2024, the same as in the previous period. Growth was recorded in major economies such as France, Italy and Spain, but also in Belgium, Ireland, Portugal, Lithuania, Cyprus, Slovakia and Finland. In contrast, Germany's economy stalled at 0 per cent, while Latvia and Austria recorded declines. The European Commission forecasts the eurozone economy to grow by 0.8 per cent throughout 2024.
Analysts' consensus is for eurozone GDP growth of 0.5 per cent year-on-year.
Source: Tradingeconomics.com
A higher-than-expected reading could be bullish for the EUR, while a lower-than-expected reading could act bearishly on the EUR.
Impact: EUR/USD, EUR/PLN
Friday, 6.09, 14:30 CET, US unemployment rate (August)
Investors' fears of a possible recession in the US increased after the unemployment rate rose from 3.7 per cent at the beginning of the year to 4.3 per cent in July. Nevertheless, this level remains historically low for the US economy. However, it is worth bearing in mind the so-called Sahm rule, which indicates that when the unemployment rate rises by more than 0.5 percentage points in 12 months, it often heralds the onset of a recession, as evidenced by data over the past 50 years.
The analysts' consensus, however, is for the unemployment rate to fall to 4.2 per cent.
Impact: Tradingeconomics.com
A higher-than-expected reading could be bearish for the USD, while a lower-than-expected reading could act bullishly on the USD.
Impact: EUR/USD, USD/PLN
Grzegorz Dróżdż, CIIA, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)
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