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- What to expect next week – 29.01 – 02.02.2018
What to expect next week - 29.01 - 02.02.2018
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Loading...Next week is expected to be filled with economic news, with traders expecting in particular the Fed's decision on the basic interest rate and then, the number of new jobs in the United States. The World Economic Forum in Davos, Switzerland is over, witnessing a series of speeches both on Wall Street's big names and on the most influential politicians in the world. The conclusion is one - over 90% of them are optimistic about the growth of the world economy in 2018, even the conservative approaches of the International Monetary Fund revised the forecast for the growth of the world economy to better - global GDP of 3.9% for 2018 and 2019. On Thursday, the ECB decided to leave the key interest rate in the eurozone unchanged, but in its speech, after the decision, Mario Draghi said, he expects inflation to rise faster than expected, and that has forced traders to hit the "Buy" button on the EUR. The United Currency is on a rally this week, reaching a 3-year high against Draggy's comments and doubts about the future of the quantitative easing program.
Next week, we expect another one for interest rates, this time in the US. Expectations among market participants are that the Fed will not raise interest rates now and March 21. The probability of an increase in March reached 94.5% (almost sure we will see an increase in interest rates), with the probability of over 98% for each subsequent meeting of the Monetary Policy Committee. However, the dollar declines day by day. If the dollar continues to decline, we expect US inflation to start at a rapid rate of growth, and this will cause the Fed to raise interest rates at least 4 times in 2018. That would stabilize USD somewhere, and if Trump's policy gets more balanced and the country's economic data improves, it's very likely we will see a reversal of the downward trend in the dollar. On Friday, again from the US, we are expecting data on new jobs in the country. Market participants expect new jobs to reach 180K in January from 148K in December when the figure surprised the markets and supported the USD decline. If this time we see worse data than expected, the likelihood that a large number of institutional traders will close their dollar-denominated positions will increase, and this in turn will further curtail the currency. We expect the USD to be traded more conservatively before the Fed's decision and before the data on new jobs is published. Following the Fed's decision, we expect increased volatility in the short term. The most important news for the dollar and the US indices will be data on new jobs. In Europe, a large part of the euro area countries will publish GDP data in January and December, and we expect volatility to decline after the strong momentum of this week.
The economic news that will move the markets next week
Monday
02:30 Australia - Sales of New Homes
09:00 UK - Harmonized Price Index
09:00 Germany - Import Price Index
10:00 Spain - GDP
15:30 US - Consumer spending
23:45 New Zealand - Trade Balance
Tuesday
01:30 Japan - Unemployment rate
02:01 UK - Gfk Consumer Confidence for December
02:30 Australia - Business Confidence from NAB
08:30 France - GDP
09:00 Switzerland - Trade Balance
12:00 Eurozone - GDP
15:00 Germany - Consumer Price Index - CPI
17:00 USA - Consumer Confidence
23:25 US - API Crude oil inventories
Wednesday
01:50 Japan - Industrial production
02:01 UK - Gfk consumer confidence for January
02:30 Australia - Consumer Price Index
02:30 Australia - Private Sector Loans
03:00 China - Production PMI
09:00 Germany - Retail sales
11:00 Germany - Unemployment rate
12:00 Eurozone - Consumer Price Index
12:00 Eurozone - Unemployment rate
15:30 Canada - GDP
17:00 USA - Selling Existing Homes
17:30 US - Crude oil inventories
21:00 United States - Fed decision on the base interest rate
Thursday
00:30 Australia - Production Index of AIG
02:30 Australia - Building permits
03:45 China - Production PMI
10:55 Germany - Manufacturing PMI
11:00 Eurozone - Manufacturing PMI
11:30 UK - Production PMI
15:30 US - Jobless claims
16:45 USA - Production PMI
17:00 USA - ISM Production PMI
23:45 New Zealand - Building permits
Friday
02:30 Australia - PPI
11:30 UK - PMI in Construction
15:30 USA - Non Farm Payrolls
15:30 USA - Average hourly wage
15:30 USA - Unemployment rate
17:00 US - Michigan Consumer Sentiment Index
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