It was another busy week for traders last week, with markets remaining volatile as both geopolitical and fundamental updates led to big swings in sentiment.
The US economy was in focus as a plethora of jobs numbers were released, culminating in a stellar jobs report on Friday. Fed rate expectations seem to be swinging on an almost daily basis, and markets with them, as we approach what could now be one of the most crucial Fed meetings of the last couple of years.
This week looks like being a ‘game of two halves’ from an economic calendar perspective, with very little of note scheduled for the first few days, while the last few sessions have the potential to see huge moves, with the ECB rate call due as well as major US inflation numbers.
As always, the fundamental calendar is just one half of the story, and traders are expecting geopolitical updates to again play a major role in moves this week. The situation in the Middle East seems to be deteriorating further, and investors are expecting this to further weigh on sentiment as the week progresses, unless there is a serious turnaround in negotiations.
Here is our usual day-by-day breakdown of the major risk events this week:
It is a quiet start to the calendar week on Monday, with little due in terms of scheduled events across all three trading sessions. Geopolitical updates from the weekend, however, are set to lead to a lively start, while holidays in both the US and Canada in the final trading session should see liquidity at lower levels.
It is another very quiet calendar day on Tuesday, with nothing significant scheduled again across the trading day. US and Canadian markets will reopen, which should see increased flow in the final session.
Chinese markets will come into focus during the Asian session on Wednesday, with key CPI and PPI numbers due out midway through the session. However, apart from that, it is another quiet calendar day, with geopolitics likely to be the main stimulus of any moves.
The calendar at last picks up on Thursday, with the last couple of sessions likely to be very busy. The European Central Bank makes its latest interest rate decision midway through the London session, while key US data in the form of the PPI numbers and Weekly Unemployment Claims figures are due out shortly after the New York open.
Friday has strong potential to be the busiest day of the week, with more key data due out in the final two trading sessions of the week. There is a big data drop out of the UK, headlined by the GDP numbers early in the London session. However, probably the biggest risk event of the week is due shortly after the New York open, when key US CPI numbers are released. Preliminary University of Michigan Consumer Sentiment and Inflation Expectations numbers are due later in the day; however, expect the key inflation numbers to dominate.
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