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US FED and BOE policy and conference focus this week


Tuesday – Eurozone GDP

The weekly economic calendar begins with a quick estimate of fourth quarter GDP growth in the euro area. The data may confirm what many already suspect. The eurozone economy will shrink by 0.1% in the last three months of 2023, after a corresponding decline in the third quarter. That would put it in a technical recession, although the overall picture is one of stagnation rather than outright recession.

A worse than expected reading would hurt the euro and put the currency on a negative footing, regardless of how interest rate expectations develop later.

US JOLTS jobs and consumer confidence on the same day. Jobs are expected to decrease to 8.73 million from 8.79 million previously, while consumer confidence is expected to increase to 113.9 million from 110.70.

Wednesday – China PMI, US FED Meeting

Wednesday is an important day for the week, because the market can give China’s official purchasing managers and index data (PMI). Forecast 49.2 from previous 49.00. The data is likely to show that the world’s second largest economy remains volatile.

China’s economy is expected to grow 5.2% in 2023, but its post-pandemic recovery has been uncertain, with a prolonged housing slump, deflationary risks and a slowdown in global growth on the outlook for this year.

China’s central bank announced last Wednesday that it will cut bank reserves by 50 basis points, the most in two years, sending a strong signal of support for the fragile economy and the &; on the market.

On the same day, the American FED announces a monetary policy meeting. Speculation about the timing and scale of rate cuts by the Fed have been the dominant market theme for some time now.

However, the central bank expects to keep interest rates unchanged at 5.50%, so it will depend on indications from the post-policy press conference of the chairman of the Federal Reserve Jerome Powell to understand how officials have interpreted recent economic conditions. information

Market participants are also closely watching ADP payrolls, which are expected to decline to 143,000 after December’s better-than-expected 164,000.

Thursday – BOE Policy Meeting

The Bank of England meets on Thursday to set policy for the first time in 2024. Like the Fed and the ECB, the BoE expects to keep interest rates at 5.25% while inflation in the UK falls. , is still well above the BoE’s 2% target.

 However, the February meeting could mark a turning point in the central bank’s fight against inflation, as the BoE may abandon its tightening stance and the three MPC members, who continued to vote for an increase after the September break, may end their dissent.

Europe Headline inflation is published on the same day. The data is expected to rise 2.9% from December’s 2.9% after the impact of the energy bill was removed from calculations. In January, it is predicted that it will grow further and that the consumer price index will increase from 3.4% to 3.2% a year earlier.

 In addition, US jobless claims will be published on the same day, the data is expected to be 211,000 from 214,000 previously, which could be neutral for the dollar.

Nirmala Sitharaman, the Union Finance Minister, is going to unveil the fiscal year’s budget, this one for the upcoming fiscal year (FY) 2024–25, that will be important event this week

Friday -Nonfarm Payroll

The US government will release its January jobs report on Friday, and the economy is expected to add 177,000 new jobs, compared to 216,000 last month.

If NFP approaches 200,000, the market may react to labor force participation rate and wage inflation numbers.

Wage inflation, measured by the change in average hourly wages, is 0.3% in January. A weaker-than-expected result could make it harder for the USD to outperform its peers, although other details point to worsening labor market conditions.

The unemployment rate expected to rises from 3.7% to 3.8%.

However, unless the blow is very large, a certain number is unlikely to reduce expectations dramatically unless the other data is equally strong and, more importantly, if Powell strikes a balanced tone.

Commodity Samachar
Learn and Trade with Ease

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