The US Federal Reserve dominates the week’s events

Inflation supports the gains of the US dollar

Will the Swiss National Bank begin to tighten monetary policy

miscellaneous economic data

US CPI inflation figures concluded last week’s events Friday after the US Bureau of Labor Statistics announced that inflation rose to 8.6% in May.

Annual inflation in the USA rose to 8.6% (fayezalajmi-4x.com). The European Central Bank had announced the start of tightening monetary policy and starting to raise interest rates starting from its next meeting in July.

The European Central Bank expects to raise interest rates by about 25 basis points in July (fayezalajmi-4x.com).

The general index of the US dollar concluded its weekly trading with gains of about 2% at the close at 104.16 levels, as the inflation data in the closing session supported the markets’ expectations of the US Federal Reserve’s continuation of its tough stance on monetary policy and a strong hike in interest rates after the markets had begun to doubt that the Fed would be slow. policy to avoid economic stagnation.

Futures contract expectations for the markets, according to the FED Watch tool from CME Group, began calculating the US Federal Reserve’s increase in interest rates by 75 basis points at its meeting next Wednesday, by more than 22%, which explains the strong movements of the markets. What are we watching this week?

Attention is focused during this week’s sessions for many economic data that will have a direct impact on currency movements, as the US Federal Reserve (Wednesday), the Bank of England (Thursday), the Swiss National Bank (Thursday), and the Bank of Japan (Friday), in addition to the Australian labor market data. And growth from New Zealand and US retail sales events this week.

US Federal

Markets and traders focus on the meeting of the largest central bank in the world, the US Federal Reserve, which will discuss monetary policy developments and interest levels on Tuesday and Wednesday, and will announce the results of the meeting at the end of the session on Wednesday, as expectations indicate that interest levels may reach 1.50% on Wednesday.

The importance of Wednesday’s meeting for the markets comes after the recent inflation data, which showed the return of fears of high inflation again after it declined in April, but it seems that the impact of the price hike resulting from the Russian-Ukrainian war still has not reached the peak yet, and thus the continuation of inflation rises, which is afflicting the shoulders of the US Federal Reserve.

Until the moment, the US Federal Reserve’s move to raise interest rates by 50 basis points in Wednesday’s meeting is the closest, despite the rise in expectations of a 75 basis point hike to 22% after the US inflation figures.

Before Friday’s inflation figures, some voices appeared from the US Federal Reserve calling and demanding the Fed to tighten monetary policy after the June and July meetings, amid rising global recession fears, but after Friday’s numbers, the markets will monitor these voices as to whether they will change their outlook until they regain control of inflation, or are recession fears stronger.

. The US Federal Reserve will also announce its quarterly forecasts for the economy and review its expectations for GDP growth, inflation and interest expectations, or what is known as the Diet Pilot chart or the points chart, which is issued every 3 months, as the US Federal Reserve is expected to reduce its growth expectations again and raise its inflation expectations.

Bank of England

The Bank of England will announce its monetary policy and interest rates on Thursday in the European session, as expectations indicate that the Bank will raise interest rates by 25 basis points to 1.25%.

The bank is heading to increase interest rates for the fifth time in a row after the bank raised interest rates at every meeting this year to counter the effects of high inflation, as it is expected that interest rates will reach Thursday to their highest levels since January 2009.

There are some members who want a stronger intervention and raise interest rates by 50 basis points after inflation exceeded 9% levels in April with expectations that it will exceed 10% before it starts to decline, but the expected economic recession fears for the United Kingdom may force them to accept the 25 basis point patches.

A report issued by the Organization for Economic Cooperation and Development revealed that the United Kingdom is about to enter a state of economic recession and that the British economy will be the worst in the developed world, with the exception of Russia, next year 2023.

The UK will release GDP growth figures on Monday morning, while employment figures will be announced on Tuesday.

Swiss National Bank

Also Thursday, in the European session, the Swiss National Bank will curse its monetary policy, as the bank is expected to keep negative interest rates -0.75% as they are unchanged.

Market expectations show that the bank may raise interest rates at Thursday’s meeting by 25 basis points, with expectations of up to 40%, after inflation in Switzerland rose to its highest level in 14 years.

It may be in July, as is the case with the European Central.