The US dollar gained for the second week in a row

Markets are awaiting the RBNZ meeting, inflation numbers from the UK and the Federal Reserve’s minutes

Does the consumer spending index solve the baffled markets?

The drama of the debt ceiling and risk appetite

Separate economic data

After the growth figures from the United Kingdom, US and Canadian retail sales, labor market figures from Australia, inflation from Japan and Canada, in addition to statements by a number of Federal Reserve members led by Jerome Powell, topped the events of last week, the financial markets return in a new week and new economic figures that will cast a shadow over the trading of the current week, led by The New Zealand Reserve Bank meeting, inflation numbers from the United Kingdom and the United States of America, the US Federal Reserve minutes, global services and manufacturing indicators, 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, growth figures for the United Kingdom contracted for the month of March, worse than expected. Growth in the United Kingdom contracted by 0.3% in March (fayezalajmi-4x.com).

On the other hand, data showed retail sales growth in the United States of America, but below expectations. US retail sales grew less than expectations in April (fayezalajmi-4x.com).

The Australian economy lost about 4,000 jobs in April, while the unemployment rate rose, and the economy lost about 4,000 jobs in April (fayezalajmi-4x.com).

Inflation in Japan exceeded expectations in April and rose to 3.4% Inflation in Japan rose to 3.4% in April (fayezalajmi-4x.com).

The general index of the US dollar recorded gains of 0.57% last week, rising for the second week in a row, to conclude the weekly session at 103.07 levels, after testing 103.50 levels on Thursday, as the US dollar was affected last week by the divergence of statements by the members of the US Federal Reserve and the debate over whether interest rates should be raised at the meeting. next or stop.

The dollar’s movements and the gains it recorded before losing a large part of it at the end of the week were the result of statements by Fed members such as Logan and Bullard, as the markets’ expectations rose with them to raise interest rates in the June meeting, before the statements of the US Federal Reserve Chairman Powell came in the closing session of the week to reduce these expectations .

Futures forecasts by CME’s FEDWatch tool now see an increase in interest rates by 25 basis points in the June meeting, by only about 17%, after it was above 37% in the middle of the week and before Powell’s testimony, which explains the dollar’s declines in the closing session.

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 meeting of the Reserve Bank of New Zealand, inflation figures from the United Kingdom and the United States of America, the US Federal Reserve minutes, and services and manufacturing indicators from major global economies lead the events of this week.

Reserve Bank of New Zealand

The markets are awaiting during the morning session tomorrow, Tuesday, the meeting of the Reserve Bank of New Zealand, where the bank is heading to raise interest rates for the twelfth time in a row by 25 basis points, reaching 5.50%, in the largest pace of tightening by the bank since 1999.

The Reserve Bank of New Zealand surprised the markets in April and raised interest rates by 50 basis points to reach 5.25%, while expectations were for a 25 basis point hike, while members agreed on the need to continue tightening monetary policy until inflation decreases, with confirmation that the full impact of monetary tightening Not fully achieved yet.

Inflation in New Zealand is still high and three times the bank’s target at 6.7% in the first quarter of this year, while the latest survey of the bank’s expectations for inflation came within the bank’s target range. Therefore, the markets see that the bank’s interest rate hike tomorrow, Tuesday, may be the last, albeit temporarily.

Fed minutes and consumer spending numbers

For the markets to anticipate during the current week one of the most important indications and signals of the Federal Reserve’s directions in its meeting in mid-June, which is represented in the Federal Reserve’s minutes of the previous meeting and the preferred inflation numbers for the US Federal Reserve, which is represented in the consumer spending index.

The Fed raised the interest rate by 25 basis points in the May meeting, as expected, and left the upcoming economic data with the task of determining future monetary policy directions and opening the door to stopping monetary tightening.

Accordingly, the markets will monitor the details of the previous meeting to obtain any hints about the extent to which members are convinced of the idea of stopping. Inflation figures, represented by the consumer spending index, will also be released at the end of trading this Saturday, Friday, to give the markets a more detailed reading of the trends of US consumers in April.

UK inflation Inflation

figures from the United Kingdom are expected to be released tomorrow, Tuesday, in the European session, where expectations indicate that inflation will decline to 8.2% in April from 10.1%, while core inflation is expected to decline below 6% levels. The Bank of England expects a strong decline in inflation in April, and therefore any reading better than expected, especially with the bank’s optimism about a strong decline in inflation that may cause a sudden turn in the markets and the pound sterling, especially after the UK’s GDP growth contracted in March by 0.3%.

Risk appetite moves

the markets Market trading has been affected since last week by the impact of risk appetite, which has become fluctuating between decline and rise, with rising fears about the US debt ceiling crisis and the faltering of negotiations more than once.

Yesterday, Sunday, we witnessed statements by the US President declaring that the current actions of the Republican Party regarding the debt ceiling talks are unacceptable, while House Speaker McCarthy announced earlier that the Republican offer is a big step backwards.

The continued stumbling of negotiations raises the state of fears in the markets and the state of uncertainty by destabilizing the markets, and therefore the markets during the current week will be hostage to contacts between the two parties and the approach or divergence of points of view.

Separate data that we follow during the week

Monday

Consumer confidence from the eurozone

Tuesday

Services and manufacturing PMIs from the Eurozone, UK and USA Richmond Manufacturing Index Home sales.

For the new America Wednesday

Reserve Bank of New Zealand meeting

UK inflation

German Ifo Business Confidence

Index Statements by the Governor of the Bank of England

US Federal Reserve

Thursday

The ultimate reading for growth from Germany growth from the USA US unemployment benefits

Friday

Inflation from Japan

Retail sales from Australia and the United Kingdom

US durable goods orders Inflation index of consumer spending