In today's market insights, we delve into Citibank's oil price predictions, the evolving competition between Huawei and Apple, the Saudi Arabia-Tesla partnership, and the upcoming rate decisions from the world's major central banks.
Important events on March 2-6
Will the pandemic be confirmed?
After the heavy selloff last week amid the coronavirus fears, next week is going to be interesting to look at. As the number of cases around the world continues rising, investors keep selling the risky assets and buying safe-havens such as the Japanese yen. We may expect more news, more cases and, probably, more damage to the markets. In case of lighter data, the risk sentiment will recover.
Reserve bank of Australia will publish the statement
The Reserve bank of Australia will release its rate statement on March 3 at 5:30 MT time. The market expects the bank to keep its interest rate on hold at 0.75%. At the same time, it may acknowledge the risks from the coronavirus, which directly hurt its main trade partner – China, and has been already spread globally. If the bank provides a dovish outlook, the Australian dollar will fall to the lows of the 2008 crisis. In case of an alternative scenario, the AUD will strengthen.
Will we see a rate cut by the Bank of Canada?
The Bank of Canada will be the second major central bank to conduct a meeting next week. The meeting is expected on Wednesday at 17:00 MT time. Coronavirus made the overnight index swaps market pricing in a 61% chance of a rate cut. At the moment, the interest rate is held at 1.75%. The rate cut will make the Canadian dollar vulnerable to a further fall. Let’s not forget that the commodity-linked currency is affected by the coronavirus fears and the weakening of the oil prices. On the other hand, hawkish comments will push the Canadian dollar up.
The United States will release the level of non-farm employment change alongside with average hourly earnings and an unemployment rate on Friday at 15:30 MT time. The forecasts are optimistic: analysts anticipate the NFP to advance by 185K, average hourly earnings to increase by 0.3%, and the unemployment change to reach 3.5% - down from the 3.6% previously. Better-than-expected figures will push the US dollar higher.
OPEC urgent meeting
Next Thursday the countries of OPEC will hold an extraordinary meeting in Vienna. They will decide on further cuts of oil output amid the weak oil prices.
It will be the hottest week of September, with four central banks’ meetings, five PMI releases, and a lot to trade.
US stock markets started falling, while the US dollar is rising. What to expect from
Oil prices are rising and Russia banned the export of its petrol. What's happening in the markets?
Today's main event for the markets is the FOMC Interest Rate Decision, where the US regulator is widely expected to keep the interest rate at the same level of 5.5%.