The dollar ends the week with the worst weekly performance in five month

China’s GDP is better than expected

Bank of Japan meeting on top of the week’s events

Miscellaneous data that we will monitor during the week

The general index of the US dollar recorded the largest weekly loss since August of last year when it closed the trading session last Friday, the 14th of January, at levels of 95.14, and after testing its lowest level in two months at 94.60 midweek, as the US dollar ignored all the news that supports the speed of the US Federal Reserve tightening. Because of his monetary policy, raising US interest rates faster during the current year, and rising expectations that interest rates will be raised four times during the current year, and not three times as was previously expected.

The statements of US Federal Reserve Chairman Jerome Powell at the beginning of the week supported these expectations, as Powell affirmed in his testimony before Congress that the US Federal Reserve must raise interest rates quickly to counter the effect of accelerating inflation.

The consumer price index in the United States of America rose in December, according to the latest figures, to 7% at an annual pace, compared to 6.8% in the November reading, in line with expectations at the fastest rate of inflation growth in 40 years.

With all this and positive news that formed most of last week’s sessions for the US dollar, the dollar did not benefit from it in anything and recorded strong declines, but in my opinion that this matter can be interpreted as a result of the beginning of the year and building new centers, especially as it comes with high expectations of pricing an opportunity of more than 90% Currently, according to the FedWatch CME Group tool, the interest rate will be raised in March, and the increase will be four times during the current year.

The latest data released last week was the US retail sales released on Friday by the end of the week, which came in below expectations and disappointed as sales fell in December by 1.9% with Omicron’s concerns raised and inflation rising on spending.

What are the markets waiting for this week?

The markets are awaiting many important economic data during the sessions of the current week. We started this morning with Chinese data from growth data and retail sales, which were issued in the Asian session, in addition to the Central Bank of Japan meeting, inflation data from Canada and Britain, Australian and British labor market data, and manufacturing data from the United States of America.

Chinese data in the Asian session

Data issued by the Chinese National Bureau of Statistics in the Asian session today, Monday, showed that the Chinese GDP grew by 4% in the fourth and last quarter of 2021, which came better than expectations that indicated a growth of about 3.7%.

On the other hand, retail sales came against expectations, as sales growth slowed in December on an annual basis to 1.7%, compared to 3.9%, while expectations were at 3.8%.

Industrial production, in turn, rose by about 4.3% in December, compared to 3.8% in November, better than expectations that indicated a growth of 3.7%, while the rate of investment in fixed assets recorded a growth of 4.9%.

Bank of Japan on the front page

Tomorrow, Tuesday, in the Asian session, the Bank of Japan is expected to announce its monetary policy, as expectations indicate that the Bank of Japan will keep its monetary policy and interest rates at -0.10 unchanged.

The strong gains of the Japanese yen last week may explain that the Bank of Japan may hint that the bank may take strict measures in the coming period, especially with the rise in inflation in Japan as is the global trend.

Japanese bond yields, in turn, recorded strong increases last week, as the 10-year bond yields rose to their highest level in a year, with fears that the Bank of Japan will tighten its monetary policy in the coming period.

Miscellaneous data that we will monitor during the week Today, Monday, US markets will be on holiday in observance of Martin Luther King Day, while manufacturing sales and the Bank of Canada survey of business outlook will be released from Canada in the evening.

On Tuesday, the Bank of Japan will announce its monetary policy in the Asian session, while in the European session we will monitor the labor market data from Britain, the ZEW index from Germany and the Eurozone – in the American session we will monitor the Empire Estate manufacturing index from the United States of America.

On Wednesday, the United Kingdom will announce inflation data in the European period, while Canada will announce inflation data in the American session, in addition to statements by the Governor of the Bank of England Billy at the end of the American session.

Thursday in the Asian session, we will monitor the labor market data from Australia (unemployment rate and change in employment), while the European region will announce the final inflation reading in the European period – in the American session, the Philadelphia manufacturing index and weekly unemployment benefits will be announced in addition to home sales.

Friday the last session of the week The minutes of the Bank of Japan meeting will be released in the Asian session and we will monitor British and Canadian retail sales in the European and American period, respectively.