The US and Canadian labor market data concluded the events of last week, which was technically the first weeks of the new year 2022, and therefore the markets were poor in liquidity and movement despite the strong data that was issued such as employment data and the minutes of the US Federal Reserve meeting of its meeting held two weeks ago and the manufacturing and services PMI.

The US labor market data was one of the most important data last week, as the US economy added jobs less than expected by 199 thousand jobs in December, the US economy added 199,000 jobs in December, contrary to expectations, and the US dollar was declining (fayezalajmi-4x.com), but at the same time, the rates came Unemployment and wage rates are better than expectations, but the markets reacted to the employment data and the general index of the US dollar declined by the end of the session.

Employment figures in general are not negative, especially if we look at the fact that they come at the end of the year, and uncertainty dominates the data on which the numbers are based, especially in light of the record numbers of the Corona epidemic recorded by the United States of America in December, but the fact remains that the American economy is far away with about 3 million jobs compared to the numbers The end of the year 2019 and if job growth continues at the current pace, it will be covered in the first half of this year.

US inflation forecasts

The labor market index is now considered the number two indicator in terms of importance to the US Federal Reserve, where the inflation index occupies the number one in terms of importance, since it is the main reason for the US Federal Reserve to change its monetary policy and its tendency towards a more stringent policy, and accordingly, the numbers that will be issued next Wednesday will be the focus of attention and investors’ attention.

Expectations indicate that inflation will rise in December at a monthly pace to 0.7% and 7.1% at an annual pace compared to 6.8% in the November reading, while the annual Producer Price Index (PPI), which will be released on Thursday, is expected to rise to more than 10% in December, and accordingly these numbers will be reflected in If it matches expectations or is higher than it, the importance of the US Federal Reserve’s response and move towards tightening monetary policy, and consequently strong movements in the financial markets.

The market is currently pricing in an opportunity of more than 80% according to FedWatch’s CME Group tool, with a rate hike in March, and this has already been priced in the markets in the current figures, but expectations are now rising that US interest rates may rise by four times this year compared to expectations three times in The latest estimates in the Diet Plot from the US Federal Reserve, and accordingly, the high expectations of a fourth hike for the current year will support additional movements for the markets.

Chinese inflation

On Tuesday, China will announce the inflation index in the second-strongest economy in the world, as the CPI is expected to decline in December to below 2% levels in December at an annual pace after rising to 2.3% in November, recording its highest reading since August 2020, as it is expected Affected by weak demand resulting from the closings in December, the producer price index (PPI) is expected to decline for the second month in a row, to 11.5%, after it peaked last October.

Jerome Powell’s testimony and statements by Fed members

In addition to inflation data, the markets are also awaiting the testimony of US Federal Reserve Chairman Jerome Powell tomorrow, Tuesday, before the Senate Banking Committee, where the testimony will be the first after his nomination for a second four-year term.

Markets will monitor Ray Powell in high inflation and his expectations for the new year and tight monetary policy. In addition to Powell’s statements, we will monitor the statements of US Federal Reserve members Loretta Meester, Esther George, Charles Evans and James Bullard during separate sessions, as the markets will stand on the extent of their openness to raising interest rates by four times this year.

Retail sales

at the end of the week By the end of this week, Friday, retail sales data will be released from the US economy, as the growth of the retail sector is expected to slow in December due to the Christmas and Christmas holidays that broke out in December.

omicron

The markets will also monitor the latest updates of the Omicron variable and the extent of countries’ response to confronting the spread, especially after recording record levels in the speed of spread and rising cases of anxiety.

The general index of the US dollar is trading at levels of 95.90 this morning, with the opening of the European markets, up by about 0.17%, after recording gains by about 0.09% last week, after giving up gains that exceeded 0.80%.