For a long time, traders considered American Non-farm Payrolls (NFP) the most important release in the market. However, the situation has changed. Now US CPI moves financial markets.
Trading plan for March 21
As usual, let’s look at the economic calendar to see if there are any good trading opportunities for today.
The day will be full of the events for the British pound. At first, we need to anticipate the release of the retail sales at 11:30 MT time. The indicator is expected to decline by 0.4%. If the actual figures are higher, the GBP will be supported. Also, the Bank of England will release its monetary policy summary and announce the official rate at 14:00 MT. We don't expect any changes here, as the central bank is driven by the uncertainties over Brexit. Though, the BOE governor Mark Carney may provide supportive comments for the British pound.
Of course, the most important event for today is the start of the EU Economic Summit. During this summit, the European leaders will decide on the extension of the Brexit process. Yesterday, the British prime minister told that she was not prepared to delay Brexit any further than 30 June. In response, the European Council Donald Tusk said that such a short Brexit extension would only be possible if Parliament agrees to support the unfortunate Brexit deal until March 29. If the sides reach an agreement today, the GBP will rise. More uncertainties will pull the pound lower. That’s why it’s highly important to follow the updates for today. At 16:30 MT time Theresa May will make her statement to the EU leaders. The final decision by the EU will be expected at around 20:00 MT time.
The higher prices seen today are generally related to the pandemic, that’s no doubt. US consumer prices jumped in October at the fastest pace in three decades putting the Biden administration on the defensive and increasing prospects that the Federal Reserve will raise interest rates next year. Jerome Powell says Fed will discuss speeding up bond-buying taper at the December meeting. What does it mean for markets?
It seems like most of the assets have joined Black Friday's sell-off with global indices, risky currencies, and commodities going down.
Gold is about to break the most significant support. The US dollar index keeps gaining momentum. However, the situation might change this week, and we might see a tiny correction. Investors might return to risk-on and push the US stock market indices and cryptocurrencies to the upside. These and more trade ideas are in our new weekly video! Do not miss it!
This week is likely to be pivotal for many assets, including gold, USD, and several stocks. However, we need to be focused and react fast to the ever-changing environment to get the most from it.
This week, the majors will be affected by the interest rate decision by the Federal Reserve, NFP, the BOE Meeting, and more events.