A look at the main events of the past week

Will the Australian Reserve change its view of interest expectations?

Market expectations of a rate hike from the Bank of England rise

US employment numbers may be affected with Omicron

By the end of last week, Friday the 28th of January, the markets concluded the week and month of the US Federal Reserve, and attention turned to the meetings of other central banks, where three central banks (Australian Reserve – European Central Bank – Bank of England) are expected to announce their monetary policies during the current week, which is considered literally The first week of February, which begins tomorrow, Tuesday, in addition to the US NFP data for January. A quick look at the main events of the past week The meetings of the US Reserve Bank and the Central Bank of Canada formed a map last week, in addition to some scattered data from here and there, while statements were absent from members of the central banks The Bank of Canada kept its monetary policy unchanged at Wednesday’s meeting.

The Bank of Canada keeps its monetary policy and interest rates unchanged (fayezalajmi-4x.com) On the other hand, the US Federal Reserve came to be hawkish than the market expectations, despite keeping its monetary policy unchanged in the January meeting of the US Federal Reserve.

No change in monetary policy (what are the reasons for the dollar’s rise) (fayezalajmi-4x.com) The general index of the US dollar managed to record its best performance since June of last year, with gains that exceeded 1.60% at closing at 97.20 levels, and it is now trading with the opening of the week on Monday at 97.07 levels.

Three central banks dominate the week’s events

Reserve Bank of Australia

The Reserve Bank of Australia will hold its first meeting of the year 2022 tomorrow, Wednesday, the first of February, to discuss its monetary policy.

The bank is not expected to change interest rates at tomorrow’s meeting, but the bank is expected to consider a $4 billion a week bond-purchasing program and indicate or hint at the bank’s intention to raise rates.

Inflation figures released last week that exceed expectations Inflation in Australia exceeds expectations and markets bet on monetary tightening rises (fayezalajmi-4x.com) is expected to force the bank to change its view and expectations for the future of interest rates.

In addition to the meeting tomorrow, Tuesday, Reserve Bank of Australia Governor Philip Lowe will speak Wednesday in front of the National Press Club.

Bank of England

After the bank raised interest rates in December by 15 basis points for the first time in three years, attention is turning this week, next Thursday, to the Bank of England meeting to determine the bank’s monetary policy in light of an uncomfortable situation of high inflation.

The markets are now pricing in an opportunity of more than 80% to raise interest rates by 25 basis points to become 0.50% in the meeting next Thursday, where it is expected that the focus of the meeting will be focused on high inflation.

The latest figures issued by the United Kingdom regarding inflation showed a rise in the CPI consumer price index to its highest level in 30 years at 5.4% in the annual reading in December, compared to 5.1% in the November reading, to move inflation away from the bank’s target of 2% and therefore requires the bank’s intervention to confront The impact of this rise on the economy.

European Central Bank

On the other hand, and in complete contrast, members of the European Central Bank and President of the Bank Christine Lagarde will also meet Thursday to determine monetary policy, which is unlike other central banks until now.

The European Central Bank, unlike the Bank of England and the Fed, sees the lack of an urgent need to change the course and monetary policy, as Lagarde has confirmed more than once that she does not see an increase in interest rates before the first half of 2023 despite the continuous rise in inflation in the euro area.

Inflation figures are expected to be announced one session before the meeting in the European session on Wednesday, as estimates indicate a decline in inflation in the preliminary estimates for the eurozone to 4.4% in January, compared to 5%, and that the core or core index will decline to 1.8% from 2.6%.

With this gap between the European Central Bank and the rest of the other central banks, the euro will be the most affected, especially against the dollar and the pound sterling this week.

NFP . Recruitment

The United States of America, as we know, will announce the NFP employment numbers on the first Friday of each month, and accordingly, the January numbers will be announced next Friday, as estimates indicate that

unemployment rates will remain unchanged at 3.9%, while a slowdown is expected in employment rates from the December reading, which Added 199,000 jobs.

The White House has warned that the rise in Omicron cases in January may affect the January numbers, as millions have temporarily left work due to illness or to care for a family member, and therefore the numbers may not be accurate under these circumstances.

The average monthly jobs amounted to 365 thousand jobs in the fourth quarter, recording the lowest average for the past year 2021, after the December reading.

The wage rate, in turn, is expected to decline in January to 0.5% at a monthly pace and to rise at an annual pace to 4.8%.

Miscellaneous data that we will follow during the week

Today, Monday, the Chinese markets will be on holiday on the occasion of the Spring Festival. In the American period, we will follow the Chicago PMI index and the statements of Federal Reserve member George.