The US dollar lost for the second week in a row

Keep an eye out for quarterly inflation figures from New Zealand and Australia

The euro area is awaiting growth figures in the services and manufacturing sectors

After the meeting of the Central Bank of Japan and Chinese growth figures issued the events of last week, the financial markets return in a new week, and new economic figures will cast a shadow over the trading of the current week, topped by the first meeting of the Bank of Canada in the year 2023, in addition to some separate numbers, and before we go back to them, we will summarize the most important events of the past week.

. With the absence of economic data issued on Monday due to the Martin Luther King Day holiday in the United States of America, China, the second largest economy in the world, announced growth figures on Tuesday morning, recording growth of about 2.9% in the fourth quarter of last year and 3% in 2022, at the slowest pace of growth since The seventies, the growth of the Chinese economy exceeds expectations and grows by 2.9% in the fourth quarter (fayezalajmi-4x.com)

The meeting of the Central Bank of Japan, Wednesday, came to lead the events of the session, after it decided to keep monetary policy unchanged and maintain the volatility of the Japanese government bond yield for a period of ten years, above or below 0.50%, while the market expectations indicated that the bank might raise the yield ceiling to 0.75%.

Central Japan maintains its monetary policy, and the yen declines by more than 300 points (fayezalajmi-4x.com) In the United Kingdom, on Wednesday morning, the Consumer Price Index (CPI), which measures inflation, rose to 10.5% in December compared to 10.7% in November, matching expectations, while the monthly index rose by 0.4% compared to 0.5%.

On the other hand, the United States of America also announced retail sales figures in the American session. The US dollar lost its opening gains, and retail sales declined in December (fayezalajmi-4x.com)

Thursday, Australia announced labor market numbers in the Asian session, as the Australian economy lost about 14,000 jobs in December, card rates are stable in Australia, and the economy is losing about 14,000 jobs in December (fayezalajmi-4x.com)

Canada, in turn, concluded the week’s dealings by announcing retail numbers by the end of the week, Friday. Canadian retail sales fell in November (fayezalajmi-4x.com)

During the week, we witnessed mixed statements by a number of US Federal Reserve members regarding interest rates, as the statements of the US Federal Reserve President in Philadelphia, Harker, and the statements of the President of the Bank in Dallas, Logan, and the member of the Bank, Waller, came with the support of slowing the pace of interest rates from the US Federal Reserve.

On the other hand, statements by Cleveland Federal Reserve Chair Loretta Mester and St. Louis Federal Reserve President James Bullard showed that the Fed should not delay raising interest rates until they reach the bank’s target of 5%, while monitoring indicators of slowing inflation, the US inflation figures. Negative figures and statements by executives and heads of banks at the Economic Forum in Davos weighed on market sentiment after expectations of a slowdown in global economic growth this year rose.

The general index of the US dollar continued to decline for the second consecutive session, losing about 0.20% when it closed the closing session of the week at 101.96 levels, after testing 102.87 levels at the beginning of the week, at its lowest level since June of last year, and trading today, Monday, at 101.77 levels. The euro against the dollar concluded the week with gains of about 25 points at the close at 1.0856 levels, while the pound sterling recorded gains of about 170 points at the close at 1.2394 levels, and the Japanese yen declined by about 170 points and closed the session at 129.50 levels.

The Canadian Central Bank leads the events of the current week

As we mentioned earlier at the beginning of the report, the markets are awaiting many economic data, which will be important to follow during the week, as the Bank of Canada leads events when it meets for the first time in the year 2023 on the morning of Wednesday, January 26th, to announce its monetary policy for the coming period. The Central Bank of Canada is expected to announce an interest rate hike of 25 basis points to 4.50%, the eighth consecutive rate hike to its highest level since 2007.

Inflation rates in Canada declined in December to levels of 6.3%, compared to peak levels of 8.1% in June, and thus expectations rose that the Bank’s move during this week would be the last to tighten monetary policy, despite the fact that the current inflation, despite its decline, is three times the Bank’s target.

Canadian labor market figures According to the latest figures for the month of December, the unemployment rate fell to 5%, recording a record level, while the economy added 104,000 jobs in December, which numbers may put pressure on the central bank if it decides to stop tightening monetary policy.

United States of America

The United States of America will announce the services PMI tomorrow, Tuesday, while the preliminary reading of growth for the fourth and final quarter of last year will be announced on Thursday, as it is estimated that the US economy may grow by 2.6% in the fourth quarter. Durable Goods Sales will be released Thursday along with the GDP number which is expected to decline by 2.4% in December.

By the end of the week’s trading, Friday, the Fed’s favorite inflation figures, represented by the PCE consumer spending index, will be announced, after it recorded declines in the last two months, as expectations indicate that the index will decline to 5.1% in December, compared to 5.5% in November.

Euro-zone

The PMI figures for the services and manufacturing sectors will be announced tomorrow, Tuesday, as the manufacturing and services sectors are expected to grow in January.