Markets have been volatile this month due to the Fed’s hawkish attitude aiming to fight inflation and a company earnings season that’s uneven. Volatility could be continuing this week as the Australian, UK and European Central Banks will be holding meetings to make their policy decisions in the following days.
Rising market prices in the U.S. could point to four or five Fed rate hikes by the end of the year while Goldman Sachs expects that the Bank of England could raise interest rates three times in 2022.
The U.S. dollar fell today, Monday, after a Fed official made hawkish comments over the weekend. The currency fell from Friday’s 1 -1/2 year high. The U.S. dollar had its best week in seven months last week as analysts rose forecasts for the Fed’s interest rate hikes and as investors turned towards safer assets and sold off riskier ones.
Stocks rose today as Chinese technology shares gained. A group of markets including the Chinese are closed due to the Lunar New Year celebrations. Japan’s Nikkei (JP225) bounced back from a 14-month low despite data on industrial output and retail services hitting below forecasts.
Oil rose more than 1% today, Monday, and was close to hitting a 7-years high reached in the previous session. Worry over supplies and the heated situations in Eastern Europe and the Middle East could set prices on their way to their highest monthly gain in almost a year. OPEC+ will be meeting this week, and it is expected that will agree to add 400,000 barrels per day to March supply levels. However, it could be unlikely for them to meet the target as they haven’t been able to reach the targets they have set in months.
Gold was up on Monday morning in Asia, but the precious metal could be on its way to the biggest monthly drop since September 2021. Investors are waiting for several key central banks to announce their monetary policy decisions this week.
Bitcoin, the world’s largest cryptocurrency in market cap, is trading around $37,000. The digital asset experienced a drop close to 20% since the beginning of the year.
What to Watch out for this Week:
Eurozone GDP Growth Data
San Fransisco Fed President’s Speech
Reserve Bank of Australia Rate Decisions
Bank of England Rate Decision
European Central Bank Rate Decision
U.S. Factory Orders
U.S. Initial Jobless Claims
U.S. Durable Goods
U.S. Non-Farm Payrolls Report
Winter Olympics start in China
Throughout the whole week:
U.S. Companies’ earnings reports (Amazon, Spotify, Sony, Ford Motor & more)