A look at the main events of the past week

Are market expectations of tightening monetary policy receding?

The statements of the heads of central banks and members of monetary policy are ahead of the economic data

Tension and heightened uncertainty was the main topic of the closing session of the markets last week, Friday, after all things were going stable during the week. The new mutant appeared to us, which was called Omicron from South Africa, to raise the temperature of the markets and incur heavy losses, amid anticipation of knowing its details by pharmaceutical companies And the World Health Organization, and whether it is resistant to the current vaccine, as it is rumored, or is it a normal mutant and responds to the vaccine.

Rising fears in the markets forced the majority of countries around the world to re-impose new restrictions to stop its spread, but was the market’s reaction exaggerated or not, this is what the coming days will reveal to us with the emergence of the details of the new mutation and its impact on global growth expectations.

A quick look at the main events of the past week Over the weekend, Monday, US President Biden kept the current US Federal Reserve Chairman, Jerome Powell, as the Fed Chair for the next four years.

Tuesday Services and Manufacturing PMI reading in Eurozone, Australia and USA dominated the events Service and Manufacturing sector better than expected in Eurozone and UK (fayezalajmi-4x.com)

In the Asian session on Wednesday, the Reserve Bank of New Zealand raised interest rates as expected, markets are awaiting the Reserve Bank of New Zealand in the Asian session (what are the expected scenarios) (fayezalajmi-4x.com),

while the Bureau of Economic Analysis read from the United States of America for durable goods orders and growth in USA below expectations The revised reading of growth and durable goods orders below expectations (fayezalajmi-4x.com)

In contrast to the improvement in the personal income and spending indicators and the Fed’s preferred indicator for measuring inflation PCE annualized at 5% in October and the dollar reacts (fayezalajmi-4x.com)

The minutes of the US Federal Reserve, in turn, showed the intransigence of the members of the US Federal Reserve and their openness towards accelerating the process of reducing asset purchases from the bank.

The minutes of the US Federal Reserve (then what next) (fayezalajmi-4x.com)

before global markets entered the Thanksgiving holiday in the United States of America on Thursday. The last sessions of the week Friday, and with the opening of the European markets, international warnings were issued that a new mutator had been discovered in South Africa that might be an antidote to the current vaccine, raising market fears, and the Dow Jones index lost the largest daily loss this year by more than a thousand points, and oil fell by more than 9% while The US dollar index lost all of its weekly gains estimated at 0.90% at closing at 96.03 levels, while the safe haven currencies, the yen and the franc, were among the biggest beneficiaries.

US employment data and central bank heads’ statements dominate the latest this week This week,

the markets are awaiting many economic data that will have the greatest impact on market movements, while statements from central bank heads and monetary policy members will be more important than the data this week. Powell’s testimony and central bank chiefs’ statements take precedence over economic data With these new developments from Macron, it is not excluded that the expectations of markets and central banks to raise interest rates will change.

Therefore, the testimony of Jerome Powell before Congress on Tuesday and Wednesday, and the statements of the Governor of the Bank of Japan and the European Central Bank of Korda and Lagarde, and the Governor of the Bank of Canada Macleam on Monday, and the Governor of the Bank of England Andrew Bailey on Wednesday will be the most important.

From the economic data that will be released this week. After the number of members of the US Federal Reserve increased and joined the team to tighten monetary policy by accelerating the process of decreasing asset purchases and ending them before the middle of the year to confront inflation, the emergence of this new strain may cast a shadow on these estimates, and accordingly lies the importance of the statements of the members of the US Federal Reserve (Williams – Clarida – Parkin – Bostick – Daly) this week.

The Central Bank of England and Canada are also on the way to start tightening monetary policy, and according to Billy and Maclim’s statements this week, their opinion regarding the new mutated and its impact on the monetary policy of the two banks may have a significant impact on the movements of the British pound and the Canadian dollar. US and Canadian labor market data lead the way The United States and Canada are expected to release NFP data by the end of this week, Friday.

A reading that exceeds expectations or is not significantly negative from the employment sector from the US economy will raise market expectations regarding accelerating the process of decreasing asset purchases from the US Federal Reserve, as expectations indicate that 528 thousand jobs will be added in November, with unemployment rates declining to 4.5%, and therefore it may support the rise of the US dollar .

On the other hand, expectations indicate the addition of about 40,000 jobs in November from the Canadian economy and a decline in the Canadian unemployment rate to 6.6%.