The market sentiment is mixed, but there are still interesting movements on the market.
5 important things this week will bring us
- Australia’s quarterly CPI and trimmed mean CPI – (Wed, 02:30 MT (00:30 GMT)) - The release is significant as the country publishes its inflation report only once per quarter. Both indicators increased by 0.4% in the previous quarter. These time we anticipate a repeat of these numbers. If the actual figures are higher, the AUD will be supported.
- FOMC statement and press conference – (Wed, 21:00 and 21:30 MT (19:00 and 19:30 GMT)) – Last time the Federal Reserve raised its interest rate to 2.5% but lowered its projections for 2019. The Fed hinted two rate hikes instead of three announced earlier. In addition, the Federal Chair Jerome Powell acknowledged the slowdown and made cautious comments on rising interest rates. Analysts anticipate no changes to the current monetary policy by the Fed, however, the comments by the Fed Chair Mr. Powell may add volatility to the USD.
- Canada’s monthly GDP – (Thu, 15:30 MT (13:30 GMT)) – The economic growth of the country outperformed the expectations in the previous month. It increased by 0.3% (vs. 0.2% expected). It made the CAD stronger. Will it happen again? We will see on Wednesday.
- US Non-farm employment change – (Fri, 15:30 MT (13:30 GMT)) – One of the most anticipated indicators is forecast to decline by 165 thousand payrolls. If the actual level is higher, the USD will rise.
- US ISM manufacturing PMI – (Fri, 17:00 MT (15:00 GMT)) - The manufacturing purchasing managers index will reach the 54.3 points, according to experts. This release may provide another wonderful opportunity to trade the greenback.
- The trade negotiations between the US and China will continue on January 30-31. The two sides haven't reached an agreement yet, despite the intensive discussions during the previous round of talks in Beijing. Some experts think the countries are far away from the final agreement. If the deal is reached, this event will be welcomed by the market.
- The challenge for the British Prime Minister Theresa May continues as the series of votes in Parliament this week may decide her Brexit deal’s destiny. The UK Parliament will vote on changes to the current Brexit deal with the EU on Tuesday. The debates are expected on Wednesday. In case of the unfortunate outcome, she could be forced to suspend the Brexit or sent back to Brussels to negotiate the impossible.
- The partial shutdown of the US government ended. However, if President Donald Trump and the leaders of the Congress can’t strike a budget deal by the middle of February which includes funding for a border wall, the government may be shut again.
US Core monthly retails sales will be announced on Friday at 15:30 MT time.
Stock significantly surged: S&P 500 and Nasdaq reached 6-week highs. The market sentiment may deteriorate today as Johnson & Johnson’s Covid-19 vaccine trails have been stopped because of the unexplained illness.
Canada’s retail sales will be out on October 21 at 15:30 MT time. Get ready with us for this event!
The market is resilient ahead of the speeches of Fed’s Powell and ECB President Lagarde, but there are still interesting movements.
The uncertainty over US fiscal stimulus and Brexit, and also rising new virus cases deteriorated the market mood. That’s why we can expect the further rally of the US dollar and the fall of riskier assets today.