The US dollar gained for the second week in

a row Markets await US inflation figures

The Japanese yen fluctuated between tightening and easing

Separate economic data

After the meeting of the Reserve Bank of Australia, in addition to the Canadian labor market numbers and growth figures from the United Kingdom, issued the events of last week, the financial markets return in a new week and new economic numbers that will cast a shadow over the trading of the current week, topped by inflation numbers from the United States of America and the United Kingdom, in addition to some separate numbers and before Let’s go over it, we’ll summarize the most important events of the past week.

The Canadian labor market numbers concluded the events of last week, Friday, after the US Bureau of Labor Statistics announced that it added 150,000 jobs in January.

Canada surprises the markets and adds 150,000 jobs, and the Canadian dollar is on the rise (fayezalajmi-4x.com) The US consumer confidence index, according to the University of Michigan, showed in its survey issued at the end of the week, Friday, a rise to 66.4 in February from 64.9 in January, to record its best reading since January 2021, reflecting the improvement in consumer confidence towards the economy due to the recent slowdown in inflation and the continuation of strong economic data.

The Reserve Bank of Australia started its first meeting this year last week, raising interest rates by 25 basis points on Wednesday, as expected. The Central Bank of Australia raised interest rates by 25 basis points, as expected (fayezalajmi-4x.com)

The markets interacted in the middle of the week with the statements of the US Federal Reserve Chairman, Jerome Powell, after he confirmed that the process of reducing inflation had already begun.

The United Kingdom was able to escape from the specter of recession after figures showed no growth or contraction recorded in the fourth and final quarter of last year. Growth in the United Kingdom fell to 0.5% in December (fayezalajmi-4x.com)

The US dollar general index recorded gains of 0.50% last week, for the second week in a row, when it closed at 103.55 levels, benefiting from the hawkish statements of more than five members of the US Federal Reserve last week in separate events, which came in agreement that the Fed’s battle against inflation has not ended yet and that Interest levels may be higher than market expectations, which means that peak interest levels may be higher than 5.5%.

The movements of the euro and the Japanese yen were the strongest during the past week, as the yen was affected by the reports issued by the appointment of the new head of the Central Bank of Japan, to close the week at 132.47, down by more than 100 points, while the euro closed at 1.0677, down by more than 100 points.

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 US inflation numbers will lead tomorrow, Tuesday, in the American session, in addition to the inflation numbers from the United Kingdom and Switzerland, the US and British retail sales numbers, and the labor market numbers from Australia.

US inflation figures

The markets are awaiting the American session tomorrow, Tuesday, the US inflation figures from the Ministry of Labor, represented by the Consumer Price Index (CPI) for January, to be one of the most important economic figures issued this week, as expectations indicate that inflation will continue to slow in January and reach 6.3% from 6.5%, but it is expected that It will rise on a monthly basis by 0.5%, and the main index excluding food and energy prices will rise to 5.4% from 5.7% in December.

The US inflation figures are important because they will give a clearer idea of the future of monetary policy from the US Federal Reserve and whether the hard-line statements of the US Federal Reserve members last week were justified or if they exaggerated expectations for peak interest levels higher than 5.2% in July compared to less than 5% almost a month ago. .

Next Thursday, the markets will also monitor the second side of inflation, represented by the Producer Price Index (PPI), to give investors a clearer idea of inflation, as the index is expected to rise by 0.4% on a monthly basis, compared to a decline of 0.5% in December, and an annual reading of 5.4%, compared to 6.2%.

. In addition to inflation figures, the United States of America is expected to announce retail sales next Wednesday, especially after the recent decline in sales in November and December by 1%, 1.1%, respectively, as sales are expected to rise in January by 1.7%.

The Japanese yen fluctuates between easing and tightening

The yen’s violent movements came at the end of last week’s trading, as it rose by more than 150 points in a few moments, after sources from the Nikkei financial newspaper reported that Japanese Prime Minister Kishida may appoint Kazuo Ueda to replace the current governor Kuroda, whose term will end in April after Masayoshi Amamiya refused the post. According to the newspaper.

The yen’s initial gains were delayed after the markets expected that Kuroda Ueda’s successor might be more hawkish than Masayoshi Amamiya, before retreating and losing all his gains also in moments after Ueda mentioned that the Bank of Japan’s stimulus should remain in place, which raised the ceiling of expectations that the central bank is even With Kuroda’s change, he may remain accommodative.

The Japanese yen declined by more than 70 points in the opening session of the week on Monday morning, trading at 132.15 levels, a few hours before the Japanese Prime Minister announced the appointment of the Governor of the Bank of Japan tomorrow, Tuesday, as it seems that Ueda is the closest, according to the latest reports issued since the end of the week, to succeed Kuroda.

Ueda, a professor at the University of Tokyo, is not a member of the current Central Bank of Japan and has not participated in stimulus policies in the last decade and therefore his monetary policy cannot be predicted as he did not make any public comments about the central bank’s policy from 2011 and therefore we are expected to witness sharp fluctuations in the Japanese yen in The coming hours until Kuroda’s successor is announced and we hear his first comment.

UK inflation

The UK is expected to release inflation figures on Wednesday morning as inflation is expected to decline to 10.3% in January on an annual basis from 10.5% in December and for the core index to decline to 6.2% from 6.3%.

Unlike the United States of America, inflation rates in the United Kingdom are higher than in the rest of the world, despite its decline from the October peak of 11.1%, to continue at its highest level in 40 years, and five times the Bank of Japan’s target of 2%.

The Central Bank of England expects that inflation will begin to decline as of the middle of this year and reach 4% by the end of the year. Thus, the markets will monitor the extent of inflation decline in January to give an idea about the bank’s movements at its next meeting.

The United Kingdom is expected to announce retail sales figures next Friday, amid expectations that sales will continue to decline by 0.2% in January after a sharp decline of 1% in December, as sales are expected to continue to decline as strikes continue.

Australian labor

market figures and Lowe’s remarks From Australia, where the markets will monitor during the current week’s sessions the labor market figures for the month of January, as expectations indicate that the economy will add 20,000 jobs in January and the unemployment rate will stabilize at 3.5%.

In addition to the labor market numbers, markets will be watching RBA Governor Lowe’s remarks on Wednesday and Friday morning, especially after the RBA revised its inflation and growth forecasts in its previous meeting minutes last week and warned that further interest rate increases are needed to ensure that high inflation is only temporary.

Switzerland’s consumer price index rose to 0.6%.

The CPI in Switzerland rose to 0.6% in January, according to figures released moments ago, compared to a decline of 0.2% in December, better than expectations that indicated a rise to 0.5%, as the increase in January was supported by a rise in electricity and gas prices and an increase in hotel accommodation prices, while Prices of air transport and petroleum products fell..

Separate data that we follow during the week

Today, Monday, in the European session, we will monitor the CPI inflation figures from Switzerland, while we will monitor the statements of the US Fed member Bowman in the American session.

Tomorrow, Tuesday, we will follow growth figures from Japan, in addition to inflation expectations from New Zealand in the Asian session, labor market figures from the United Kingdom and growth reading from the eurozone leading the events of the European session, inflation figures from the United States of America and statements by Fed members Logan, Harker and Williams, the most important events of the American session.

On Wednesday, we will monitor the statements of the Governor of the Central Bank of Australia, Lowe, in the Asian session, while the inflation figures from the United Kingdom will lead the events of the European session. In the American session, we will monitor the retail sales figures and the Empire State Manufacturing Index.

Thursday, we will be with the Australian labor market numbers (change in employment and the unemployment rate) in the Asian session, while the American PPI producer price index will be released in the American session, in addition to the Philadelphia Manufacturing Index and the weekly unemployment benefits.

Friday, the last session of the week, we will monitor the statements of the Governor of the Australian Bank, Lowe, in the European session, while the retail sales from the United Kingdom will lead the events of the Asian session.