The Reserve Bank of New Zealand’s meeting and the PCE index lead this week’s events (Currency Weekly Report)
The Reserve Bank of New Zealand’s meeting and the PCE index lead this week’s events (Currency Weekly Report)
21 February، 2022
ابحاث السوق
Views : 466
A look at the main events of the past weeK
Geopolitical tensions are still at the fore
Will the Bank of New Zealand continue to raise interest rates?
Markets await the Fed’s preferred indicator of inflation
After pulling and pulling during last week’s trading, the general index of the US dollar, which is concerned with measuring the strength of the dollar against a basket of currencies, ended with a slight decrease of about 0.07% at closing from 96.08 levels, affected by the geopolitical fluctuations that the markets witnessed during the week, in addition to the absence of strong economic data affecting market movements, with the exception of sales. US retail released mid-week.
Before we see what the markets are waiting for this week, we will take a quick look at the most important events of the past week.
The state of anxiety and fear in the markets increased at the beginning of the week, coinciding with the intensification of statements from the Ukrainian side that it was aware that Russia would feed Ukraine on Wednesday, before the official spokesman retracted these statements at a later time, to inflict losses on currencies and assets that support risks.
Her head is the dollar and gold. US retail sales released midweek, which came in numbers that exceeded expectations failed to support the US dollar US retail sales at their highest level in ten months – Fayez Alajmi – Fayez Alajmi (fayezalajmi-4x.com)
On the other hand, labor market numbers from Australia came to support the Australian dollar, the card rate stabilizes in Australia, and the economy adds about 12 thousand jobs (fayezalajmi-4x.com)
UK retail sales rose in January better than expected UK retail sales beat expectations (fayezalajmi-4x.com).
The index is trading for a year for the US dollar this Monday morning, with the opening of the European markets, down by about 0.30% at levels of 95.80.
Geopolitical tensions still prevail
The upcoming news and statements regarding the possible Russian-Ukrainian conflict continue to raise the market temperature every now and then, and control negatively and positively the market sentiment and the risk situation. The latest news coming from Washington stated that the United States of America had intelligence information that Russian leaders had received orders to begin the process of invading Ukraine.
These statements come after Russia canceled on Sunday its previous pledges to withdraw tens of thousands of its forces from the northern borders of Ukraine, which was described as another step in the path of planned enrichment from Russia to Ukraine. On the other hand, the markets are awaiting an expected meeting between US President Biden and Russian President Putin, after the two parties agreed to the meeting in principle, but the timing and location were not specified.
Will the Bank of New Zealand continue to raise interest rates?
In the Asian session, Wednesday, February 23, the Reserve Bank of New Zealand meets to announce monetary policy and interest rates, followed by a press conference for the bank an hour after the statement was announced. Expectations indicate that the bank will raise interest rates for the third consecutive meeting by a quarter of a percentage point, or 25 basis points, to reach 1%, after it was raised in the October and November meetings of the year 2021.
There is also a possibility that the bank will resort to raising interest rates by half a point or 50 basis points in Wednesday’s meeting, especially with the rise in inflationary pressures in New Zealand, where the markets are pricing in about 30% that the bank will raise interest rates by half a point.
The bank will also update its expectations for growth, inflation and future interest rates, as the bank is expected to raise its expectations for future interest rates. The Fed’s favorite inflation indicator is on the front page At the end of this week, Friday, the Bureau of Economic Analysis in the United States of America will announce the figures of the Personal Consumption Expenditure Index (PCE), which is the preferred indicator for measuring the real inflation rates of the US Federal Reserve.
Estimates indicate that the monthly index rose to 0.6% in January after rising by 0.4% in December, and the annual index rose to 6%, compared to 5.8% in the December reading, to record the highest reading for the index since 1982.
The core index, as it is called, excluding food and energy prices, is expected to rise to 5.2%, compared to 4.9%. These numbers still confirm the continuity of the rise in inflation and its failure to reach the peak until the moment, and thus will raise the expectations of the markets for a faster and stronger tightening than the US Federal Reserve. The last reading of futures contract expectations according to the CME FedWatch tool shows a decline in expectations for a rise by 50 basis points to about 18%, compared to more than 70% a few days ago.
Therefore, the rise in PCE numbers may raise these expectations again and vice versa if the numbers come below expectations.
Miscellaneous data that we will follow during the week T
Today, Monday, in the European session, we will follow the preliminary reading of the manufacturing and services PMI released by the Eurozone and the United Kingdom, while the US markets will be closed for President’s Day.
On Tuesday, we will follow the annual inflation index from Japan in the Asian session, while the German Ifo index numbers will be released in the Asian session. In the American session, we will follow the preliminary reading, the services and manufacturing PMI, in addition to the consumer confidence index.
Wednesday, Japanese banks will be on holiday to turn attention to the Reserve Bank of New Zealand meeting in the Asian session, a listening session for the monetary policy report from the United Kingdom, which we will monitor in the European session, in addition to the final reading of the inflation reading from the Eurozone.
Thursday, the United States of America will announce the revised reading of growth in the American period in addition to the weekly unemployment benefits numbers and new home sales.
Friday is the last session of the week. We will monitor the final growth figures from Germany and France. On the other hand, the focus will be on the US personal spending and consumption figures in the American session.
05/11/2024
ابحاث السوق
شارك المقال على منصات التواصل الإجتماعي
