Commodity Market News | A Fiery Week Ahead as FED, BOE and BOJ in the Spotlight.

Commodity Market News | A Fiery Week Ahead as FED, BOE and BOJ in the Spotlight.

Commodity Market News:

Monday – Light economic calendar

The weekly economic calendar will begin with German and Spain CPI numbers as per latest commodity market news. German CPI is foreseen at 0.2% slightly lower from previous reading of 0.3%. Spain CPI expected to be higher by 3.8% from 3.5% previously.

Tuesday -Bank of Japan policy

The Bank of Japan is scheduled to announce its decision, time is tentative. And the market is having speculations about a possible change in the yield curve control (YCC) policy. The Japanese central bank, however, is questionable to move away from its negative policy rates.

According to the latest commodity market news, it’s going to be a big divergence in comparison to other major central banks, including the Federal Reserve (Fed). This sentiment continued to weigh as the Japanese Yen weakened as compared to the dollar.

From the Eurozone, Preliminary data on consumer price inflation is set to release. Which is expected to show the headline rate slowing to 3.1% in October compared to previous month’s reading of 4.3%, coming closer to the ECB’s 2% target, even if high energy costs continue to pose an upside risk.

GDP data the same day is expected to show that the Eurozone economy contracted by 0.0% in the third quarter, for an annual rate of growth of just 0.2%.

Last Thursday, ECB President Christine Lagarde hinted at steady policy ahead and pushed back against rate cut expectations.

On the same day, US CB Consumer Confidence and China Manufacturing PMI is due release.

Wednesday – FED policy decision

It will be a very important day during the week, as focus will shift on the Federal Reserve’s policy meeting with an anticipation to keep the rate unchanged at 5%. After the decision, policymakers’ views on the state of the economy and the outlook for interest rates will give significant moves to the market.

Most investors are betting that the Fed is done tightening after Chair Jerome Powell said that rising long-term yields reduce the need for further rate increases, though some believe another hike could come when the central bank meets again in December. In the last month, Fed Chair Jerome Powell stated that inflation is still too high and this raised the expectation that additional rate hikes by the end of the year cannot be ruled out as per the latest commodity market news.

Thursday – Bank of England policy decision

The Bank of England will publish policy decisions. Market anticipation is to keep its benchmark interest rates on hold at a 15-year high of 5.25% on the back of growing worries about a recession.

The UK central bank, however, is unlikely to relax its stance in the fight against high inflation rate and might keep the door open to further tightening. Policymakers are also expected to reiterate that rates will need to remain around current levels for quite some time to come despite growing signs that the economy is flat lining.

Furthermore, German, Spain and Germany PMI numbers due to release, which could have a neutral impact on the Eur. As all numbers are foreseen almost unchanged.

Friday – US nonfarm payrolls

On the weekend, the US nonfarm payrolls report for October is due to release. Economists are expecting more moderate jobs growth of 182,000 compared to previous month jobs of 336,000, which is still consistent with a robust labor market.

The unemployment rate is expected to remain unchanged at 3.8%, while wage growth is expected to ease to 0.3 % YoY, which would mark a post-pandemic period low. This could help lift the Fed view that price pressures are easing and that it doesn’t need to raise interest rates any further.

Commodity Samachar
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