The US labor market figures and the US Federal Reserve topped the most important events of the first week of the year 2023, which began on Tuesday, the third of January, after the Monday market holiday, as we witnessed strong movements in the currency markets during the past week, with the entry of new liquidity in the markets and building positions at the beginning of the year, so that the general dollar index rose The American economy rose by about 2% during the week, before retreating and losing more than half of the gains in the closing session, after the announcement of the American labor market numbers and the slowdown in the wage level.

Wednesday, the fourth of January, we witnessed the announcement of the first and most important data of the new year, as the manufacturing PMI fell in December by about 0.6 points, the ISM manufacturing index, at its lowest level since May 2020 (fayezalajmi-4x.com)

At the end of the session, the minutes of the US Federal Reserve meeting held in mid-December showed that the US Federal Reserve members noticed a decline in inflation in October and November, but they stressed that more emphasis is needed on this decline and the trend towards the bank’s target. current.

The initial reading of the US labor market numbers came on Thursday, as the private sector announced adding 235,000 jobs in December, exceeding expectations, to open the door to positive numbers expected at the end of last week. The US private sector added 235,000 jobs in December (fayezalajmi-4x.com)

Inflation in the eurozone declined, according to Eurostat figures, to 9.2%. Inflation in the eurozone was below expectations in December (fayezalajmi-4x.com) We concluded the week with the most important event, represented by the US NFP figures for the non-agricultural sector, which announced numbers that exceeded expectations, while unemployment rates fell to record levels.

The US economy added 223 thousand jobs in December and wage rates declined (fayezalajmi-4x.com) The general index of the US dollar, and after it ended last week with gains of about 0.25% when it closed at 103.88 levels, it is back and declining by about 0.45% this morning, Monday, in the opening session of the week, and it trades at 103.43 levels.

In terms of pairs’ movements, the euro pair closed against the US dollar, with a loss of about 60 points, despite the gains that exceeded 120 points in the last sessions of the week when closing at 1.0645 levels, and today, Monday, it rose by about 50 points, trading at 1.0695 levels, while the pound sterling compensated for all its weekly losses, which It reached 250 points, to close at 1.2090 levels, before rising this morning by about 70 points, to trade at 1.2163 levels.

Inflation tops the events of this week After surpassing the US labor market numbers last week, the markets return with new data during the trading week of the second week of this year, as the US and Australian inflation numbers, in addition to the growth figures from the United Kingdom and the statements of the US Federal Reserve head, topped the most important events of the week.

Inflation returns to the fore Attention will turn to US inflation figures, which will be issued next Thursday, January 12th, as markets no longer monitor the peak level of inflation, but the focus has become on how far inflation will decline and the speed of decline, as we recall that inflation began to decline from peak levels of 9.1% in July of last year to reach 7.1% in the latest inflation reading in November.

It is estimated that the consumer price index may decline to 6.5% in December on an annual basis from 7.1%, and that the core index excluding food and energy prices will decline to 5.7% from 6%.

Inflation figures, if they decline, will support the US Federal Reserve’s decision to slow down the pace of monetary tightening, as according to the estimates of the futures markets from FedWatch issued by CME, the markets priced a 25 basis point hike in interest rates at the Bank’s meeting on November 1, by 75%.

Thus, the numbers will support this hypothesis and become confirmed. Inflation from China, Japan and Australia In a related development, in addition to the United States of America, China, Japan and Australia will announce inflation figures this week, as inflation is expected to rise in the second largest economy in the world to 1.8% from 1.6%, while inflation in Australia is expected to rise to 7.3% compared to 6%. 9% in the November reading.

The Japanese economy will announce inflation figures on Tuesday in the Asian session, and it is expected that inflation will rise to 3.8%, which will put pressure on the monetary policy makers at the Central Bank of Japan, especially after the Bank’s recent move.

\\In addition to these economic figures, we will monitor on Tuesday the statements of the Governor of the Central Bank of Canada, Macklem, in addition to the statements of the US Federal Reserve Chairman, Jerome Powell, in Stockholm, in a panel discussion entitled the independence of the central bank.