Abstract：While Investors will get busy with a packed economic calendar this week. Inflation and unemployment numbers in the US and elsewhere will be among the data traders will follow and adjust their portfolios accordingly. Additionally, markets will tune in to heads of central banks speeches such as the Fed and the ECB to find out their thoughts about their economies, and to get some hints about the potential monetary policy in the next year.
While Investors will get busy with a packed economic calendar this week. Inflation and unemployment numbers in the US and elsewhere will be among the data traders will follow and adjust their portfolios accordingly. Additionally, markets will tune in to heads of central banks speeches such as the Fed and the ECB to find out their thoughts about their economies, and to get some hints about the potential monetary policy in the next year.
The FOMC minutes of the previous Fed meeting showed a dovish surprise as the central banks officials discussed possible smaller rate hikes. Hence, markets expect less aggressive rate increases in the upcoming meetings, starting with a 50 bp rate hike rather than 75 bp on December 14th, and between 25 to 50 pb in Q1-23 (depending on the inflation data).
Based on that the US dollar lost nearly 2% of its value last week, while some currencies like the Pound sterling rallied to a multi-month high against the US Dollar. Commodities, such as gold stabilized above $1750/oz giving the US dollar with the 10 years treasury yields retreat, while the oil price hit a multi-month low on prospects of lower demand due to Chinas unrest on one hand and a possible global recession on the other.
Economic data highlights
Monday 28th of November
• ECB President Lagardes Speech
• Fed Williams Speech
Tuesday 29th of November
• JPY- Unemployment Rate (OCT)
• JPY- Retail Sales (OCT)
• CHF - GDP Growth Rate (Q3)
• EUR- Consumer Confidence Final (NOV)
• EUR- Economic Sentiment (NOV)
• EUR- Inflation Rate (Germany- NOV)
• CAD- GDP Growth Rate (Q3)
• USD- CB Consumer Confidence (NOV)
• USD- House Price Index MoM (SEP)
Wednesday 30th of November
• JPY- Industrial Production (OCT)
• CNH- NBS Manufacturing PMI (NOV)
• EUR- Unemployment Rate (Germany-NOV)
• EUR- Core Inflation Rate Flash (NOV)
• USD- ADP Employment Change (NOV)
• USD- GDP Growth Rate (Q3)
• Fed Cook Speech
• Fed Chair Powells Speech
Thursday 1st of December
• AUD- Global Manufacturing PMI Final (NOV)
• BoJ Kuroda Speech
• EUR- Retail Sales (Germany-OCT)
• CHF- Inflation Rate (NOV)
• EUR- Global Manufacturing PMI Final (NOV)
• GBP- Global/CIPS Manufacturing PMI Final (NOV)
• USD- PCE Price Index (OCT)
• USD- ISM Manufacturing PMI (NOV)
• CAD- Global Manufacturing PMI (NOV)
• Fed Bowman Speech
• Fed Logan Speech
Friday 2nd of December
• RBA Gov Lowe Speech
• ECB President Lagardes Speech
• CAD - Unemployment Rate (NOV)
• USD- Non-Farm Payrolls (NOV)
• USD- Unemployment Rate (NOV)
• Fed Evans Speech
The US Data Most Awaited Data
The US markets traders will watch the manufacturing ISM read of November as it is expected to fall below the 50-threshold, indicating that the economy is generally declining.
Investors will follow the core personal consumer expenditure index rate of October (the Fed‘s favorite measure of inflation) which is expected to fall from 5.1% to 5.0%. Any lower-than-expected read highlights the Fed’s success in pointing the inflation rate in the correct direction and this could send the US dollar to trade even lower.
Markets expect the NFP report on Friday to show that the US economy added in November 200K jobs while the unemployment rate remained at 3.7%. It should be noted that we could see higher unemployment rates in the coming months due to big layoffs from tech giants caused by reasons such as uncertain economic outlooks and lower profits.
The Eurozone Inflation Rates
The Euro markets traders will focus on the November inflation read as it will be very related to the December rate hike decision. Markets expect the inflation headline in the Eurozone to decelerate from 10.6 to 10.4 as energy prices have been moderating and the supply chain disruption has been fading.
Hence, it is likely to see the ECB hiking rate by 50 bp in its last meeting in 2022.
The Centre for the Promotion of Private Enterprise (CPPE), in the organized private sector, has reiterated the FX market by combining the various rates and making sure the rates are driven by the market. This recommendation follows the sustained depreciation of the naira throughout the year 2022. In an interview with the New Telegraph in Lagos by Dr. Muda Yusuf, the Director and Chief Executive Officer of CPPE. According to him, the official rate had risen to N461/$ and the parallel/BDC rate reached N750/$.
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EUR/JPY - This is the forex quote for the Euro vs. Japanese Yen exchange rate. EUR (the 'base currency') is quoted in terms of JPY (the 'counter currency'). The Euro (EUR) rallies sharply on Friday, ahead of the weekend, as the Japanese Yen (JPY) weakened following the Bank of Japan’s (BoJ) monetary policy meeting, with the BoJ resolute in keeping its dovish stance, and the Yield Curve Control (YCC).
The Australian dollar projected through the first week of the year with an average daily range over two percent on each active trading day. After all the noise, it finished around one percent higher for the week.