The US dollar is on a weekly decline

Three central banks lead the events of this week

Do you determine the US inflation figures as a result of the Federal Reserve meeting?

S0eparate economic data

After the meeting of the Reserve Bank of Australia and the Bank of Canada issued the events of last week, the financial markets return in a new week, and new economic figures will cast a shadow over the trading of the current week, led by the meeting of three central banks in addition to some separate numbers, and before we go back to them, we will summarize the most important events of the past week.

At the beginning of the week, the Reserve Bank of Australia raised interest rates by 25 basis points, in a move that surprised the markets. The Australian Central Bank raised interest rates by 25 basis points, contrary to expectations (fayezalajmi-4x.com).

On the other hand, the decision of the Central Bank of Canada also came to raise interest rates, contrary to expectations. The Central Bank of Canada surprised the markets and raised interest rates by 25 basis points (fayezalajmi-4x.com).

At the end of the week’s trading, Friday, unemployment rates in Canada rose to their highest levels since August of 2022. The unemployment rate in Canada is at its highest levels since August 2022 (fayezalajmi-4x.com).

The general index of the US dollar recorded losses of 0.60% last week, declining for the second week in a row, to conclude the weekly session at 103.53 levels, as the US dollar was affected last week by the decline in market expectations for the US Federal Reserve to raise interest at its meeting this week.

What will we watch this week? Attention is directed during the sessions of this week to many economic data that will have a direct impact on currency movements, as the meetings of the US Federal Reserve, the European Central Bank, and the Central Bank of Japan, in addition to US inflation numbers, the eurozone, growth from the United Kingdom and New Zealand, the labor market from Australia, and some separate figures lead the events of this week.

. US Federal

The focus of markets and traders will be on the meeting of the largest central bank in the world, the US Federal Bank, which will start its meeting to discuss monetary policy developments and interest levels tomorrow, Tuesday, and its results will be announced on Wednesday at the end of the American session, as expectations indicate that the Fed will maintain its monetary policy and interest rates at current levels 5.25 % after a series of lifting operations that continued for ten consecutive meetings.

The latest inflation figures released from the United States of America showed that the consumer price index rose by 0.4% in April on a monthly basis, after an increase of 0.1% in April, while the main index, excluding food and energy prices, came at 0.4%, the same reading as in March. On the other hand, the annual index rose over the past 12 months to 4.9% in May from 5.0% in March, while expectations were stable at 5%.

The annual basic index excluding food and energy prices rose to 5.5% on an annual basis in April from 5.6%. The last inflation reading for May will be issued hours before the US Federal Reserve meeting tomorrow, Tuesday, as estimates indicate that inflation is expected to slow to 4.1% in May on an annual basis, the slowest inflation reading since April 2021, and to decline to 0.2% on a monthly basis.

Inflation numbers, if they are close to or below expectations, confirm to a large extent the US Federal Reserve’s abandonment of its tightening policy, especially if compared to the peak levels recorded in July of last year of 9.1%. These levels are under control and seem to be heading towards the Fed’s target without additional intervention.

According to the estimates of the futures markets from FedWatch issued by CME, the markets are pricing in raising interest rates by 25 basis points at the Bank’s meeting on Wednesday, by 24%, compared to more than 60% at the beginning of last week, after the statements of the Federal Reserve members, while the interest rate is priced at 76%, and therefore will be determined Inflation numbers tomorrow, Tuesday, are the majority of this percentage, and will largely determine the outcome of the Federal Reserve meeting.

In addition to the inflation numbers, the US labor market figures also came in support of the US Federal Reserve, after the economy added about 339,000 jobs in May, the unemployment rate rose to 3.7%, and the wages fell by 0.3% and 4.4% on a monthly and annual basis, respectively

. The bank’s interest decision on Wednesday, in addition to the press conference of the bank’s president, Jerome Powell, accompanies the bank’s members’ quarterly expectations for the future of interest rates, growth, and inflation, and what is known as the dot plot, which draws expectations for future interest rates, which will move the markets in the coming period.

European Central Bank

On Thursday, the European Central Bank will announce its monetary policy and interest rates, as it is estimated that interest rates will be raised by about 25 basis points, to reach 4%.

Inflation rates in the eurozone in the May reading came at 6.1% in the initial reading, compared to 7% in the April reading, while the main index, excluding food and energy prices, rose to 5.3% in May, compared to 5.6 in the April reading.

These figures for inflation from the eurozone showed a decline in inflationary pressures, while indicators supporting a slowdown in growth in the eurozone escalated after the recent figures for the PMI Markets are currently pricing another increase of 25 basis points, which may be in next July.

The statements of European Central Bank President Christine Lagarde and a number of monetary policy makers in the European Central Bank in the previous period support less tightening in the bank’s monetary policy, and therefore investors will focus on Christine Lagarde’s statements in the press conference to read the expectations of the future of the bank’s monetary policy and whether the bank will stop after Thursday’s meeting or We will witness another hike before stopping.

Bank of Japan

The Central Bank of Japan will announce the results of its meeting at the end of the week, Friday, in the Asian session, where expectations indicate that the bank will keep its monetary policy and interest rates unchanged at levels of -0.10%.

Inflation rates in Japan reached 3.4% in April, levels that remain higher than the bank’s target of 2%, but the bank’s expectations that inflation will reach a target by the fiscal year ending in March 2023 support the bank’s keeping of the current policy without change on Friday, especially since the bank’s governor, Ueda, confirmed for more than Once that he needed some time before making any change in the bank’s current incentive policy.

Separate data that we follow during the week

Monday

Producer price index of Japan

Statements by a member of the Bank of England

The general federal budget

Tuesday

Labor market figures from the UK

economic confidence index Inflation from the USA

Statements by the Governor of the Bank of England

Wednesday

growth from the UK

industrial production of the eurozone

US producer price index

US crude oil inventories

US Federal Reserve meeting

Thursday

growth from New Zealand

Labor market figures from Australia

industrial production from China

US retail sales European Central Bank meeting

US unemployment benefits

Friday

Bank of Japan meeting

The final inflation reading from the Eurozone

US consumer confidence