Economic Outlook: What Secrets Do US FED Minutes and Eurozone PMI Hold for Market Volatility?

The Economic Outlook for the week is in and the most anticipated data of the week are of course the US FOMC meeting minutes and the UK, Eurozone and US PMI numbers.

The market watchers will also hear from Federal Reserve officials during the week, including Atlanta Fed President Raphael Bostic, Governors Lisa Cook and Christopher Waller and Vice President Philip Jefferson. Which could attract volatility against the dollar.

China’s markets return from a weeklong Lunar New Year holiday on Monday, with investors waiting to see what Beijing will do next to revive its battered stock market.

Earlier on Sunday, China’s central bank left the benchmark interest rate unchanged as expected, as uncertainty over the timing of Federal Reserve rate hikes limits Beijing room for maneuver in monetary policy.

Economic Outlook: Important Data and Event Scheduled this week

Monday – Light Affected Data

The weekly economic calendar begins with a bank holiday in Canada and the United States. Little impact is expected from the Eurozone on Monday, including Germany’s Buba monthly report. This may have a neutral effect on the currency.

Tuesday – Canadian Inflation Figures

Markets reacted strongly to Canadian inflation statistics for January. Inflation has cooled sharply in recent months, with the CPI falling to just 2.6 percent in December, prompting the Bank of Canada to abandon tightening.

The monthly CPI is now forecast at 0.4%, while it is expected to contract by 0.3%. The data could be positive for the Canadian dollar.

The Reserve Bank of Australia meeting on the same day has a light effect on the dollar.

Wednesday – US FOMC Minutes

The Economic Outlook for Wednesday is quite interesting. Australia publishes wage price index q/q forecast 0.9% vs. 1.3% earlier, data may negatively affect currency.

In addition, the minutes of the last Federal Reserve meeting will be released later that day. Investors are looking for clues about the possible timing of the first rates. We’ve heard from a number of Fed officials since that meeting, and most have advocated patience on interest rates and warned against premature cuts given the strength of the U.S. economy.

If the minutes repeat a similar tone, the dollar could gain further momentum.

Borrowing costs were left unchanged by the decision makers on 30-31. at their January meeting and stated that surgery at their March meeting was unlikely.

Several Fed officials, including Fed Chairman Jerome Powell, have indicated that more time is needed to ensure that inflation is on a sustainable path to the Fed’s 2 percent target.

Thursday – PMI numbers

Another set of data to in focus as per the economic outlook is the Eurozone and UK PMI data will be released on Thursday, leading to intraday volatility.

Both economies have been plagued by stagnant growth for some time, and Britain even fell into a technical recession at the end of last year.

The final core and consumer price indices of the euro area is published. These figures are expected to remain unchanged from previous readings of 3.3% and 2.8%. The numbers have a neutral effect on the euro and the precious metal.

In addition, the US unemployment insurance will be released on the same day, the data is expected to be 217,000 from 212 last year, which may have a neutral effect on the dollar.

At the same time, the US Flash Manufacturing PMI and Flash Services PMI may decrease slightly compared to the previous one, which could have a negative impact on the Greenback.

The numbers are 50.1 from the previous 50.7 and 52.00 from the previous 52.50.

In addition, core retail sales m/m and retail sales m/m are attracting attention from the Canadian side. Retail sales m/m numbers are forecast at 0.7% vs. a 0.5% contraction, and retail sales m/m numbers are forecast to increase 0.8% vs. a 0.2% contraction. Both numbers can have a positive impact on base metal prices.

Friday US PMI

German final GDP q/q data released, forecast to decrease -0.3% y-o-y, may have negative impact EUR

Commodity Samachar
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