We bring you a regular recap of the fundamentals that influenced the markets in the past trading week.
The markets were anxiously awaiting Wednesday's long-awaited data from the US and Canada, mainly concerning the interest rate change.
At the beginning of the trading week, the data on the Purchasing Managers' Index (PMI) marking sentiment in the UK manufacturing sector came in slightly negative compared to the previous results:
Composite PMI: 53.4 versus 53.6
Manufacturing PMI: 56.9 vs. 57.9
Services PMI: 53.3 versus 53.6
The British pound began to weaken slightly on the basis of these results.
The bigger expected event of the week was the announcement of Canadian interest rates, which were left unchanged by the Bank of Canada (BOC) at 0.25 %.
However, this was a disappointment to the markets as the markets were pricing in a 70% probability of an increase and the Canadian dollar began to weaken. The Board of Governors prospectively expects rates to have to rise.
Full statement by the Bank of Canada:
https://static.bankofcanada.ca/uploads/pdf/mpr-2022-01-26.pdf
On the same day (Wednesday) the markets were also waiting for the announcement of the change in US interest rates, which the Fed left unchanged as expected at the current level of 0.25 %.
Jerome Powel (Chairman of the US Federal Reserve) mentioned that there is room for a rate hike without hurting jobs. Labour market conditions are consistent with maximum employment and there is currently a very strong consensus that it will soon be time to raise rates.
At the end of the week, the markets were still waiting for the US GDP results, which came out really positive for the US dollar: 6.9 % versus 2.3 %.
These events caused the US dollar to strengthen strongly in the second half of the week.
The start of this week will be weaker on economic data. We expect only GDP results from the euro area. On the other hand, we expect increased volatility on Tuesday and Thursday through interest rate announcements in Australia, the UK and the Eurozone. Also of interest will be the incoming PMI data from the US and the UK.
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Welcome to Monday's regular summary of fundamentals, which was mostly rich in data on Japanese and EU monetary policy.
At the beginning of the week (18.1.) we watched the incoming data on the interest rate change in Japan.
The Bank of Japan decided to keep the short-term interest rate at -0.10 %, which was also expected. Haruhiko Kuroda (BOJ Governor) stated in his press conference that he will ease monetary policy without hesitation if needed. There were no substantive and hawkish words and Kuroda rather stuck to the "mantra" from previous press conferences where interest rates have not moved from -0.10 % since 2016.
Thursday (20 January) was interesting because of the publication of the ECB's report on the monetary policy meeting held on 15 and 16 December 2021. ECB Governing Council member Isabel Schnabel assessed financial market developments since the previous meeting, which took place on 27 and 28 October 2021. It is evident that uncertainty about the future path of rates has increased, which has contributed to volatility in the markets. It has been stressed by a number of governors that the ECB should be more willing to adjust policy in either direction to stabilise inflation.
The full report of the meeting can be found here:
https://www.ecb.europa.eu/press/accounts/2022/html/ecb.mg220120~7ed187b5b1.en.html
At the end of the week, we were waiting for the December British Retail Sales data, but it was not very encouraging (currently - 3.7 %).
This week will again bring us interesting data in the field of interest rates. Wednesday will be particularly important, where we will see these data from the US and Canada. In addition, fundamental data will be coming in during the week regarding the British PMI and CPI in Australia and New Zealand.
The markets have properly woken up after the holidays, and so nothing but increased volatility can be expected on these coming days.
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Welcome to our regular Monday recap of the most interesting economic events that affected our trading last week, which brought a bit more than the first week of the New Year.
People are starting to wake up and recover from the New Year celebrations and so are the markets.
Tuesday (11 January) was mostly in the Fed's sights. During the day, we could see several speeches by members of the US Federal Open Market Committee (FOMC). One of the speakers was Esther George (President of the Federal Reserve Bank of Kansas City), who spoke about the outlook for economic and monetary policy in her window. Loretta Mester (President and CEO of the Federal Reserve Bank of Cleveland) would support a March 2022 rate hike if the U.S. economy remains on track.
At the end of the day, Fed Chairman Jerome Powell mentioned that the US economy has been expanding at a very fast pace in recent years and that the labour market is strong...
Other Fed officials are calling for more aggressive balance sheet normalization. Powell's comments suggest that he disagrees with this thinking and there was a slight weakening of the USD during his speech.
Powell's entire speech:
A day later, on Wednesday (12 January), we were interested in the latest data from the US Consumer Price Index (CPI), which is key for measuring inflation and purchasing trends.
The current value was slightly better than the previous one (0.6 % compared to 0.5 %).
On Tuesday, before a series of speeches by Fed members, ECB President Christine Lagarde gave a speech on the pressure of rising prices, which must be taken very seriously. The ECB expects inflation to fall this year and return below the 2 % target in 2023 and 2024.
At the end of the week, we expected new data from the UK regarding manufacturing output, which came out positive: 1.1 % actual vs. 0.1 %.
This week will be rich in fundamentals. On Tuesday, the Bank of Japan will comment on monetary policy and release new data on interest rate changes. On Thursday, the ECB will release its monetary policy meeting report. We expect increased volatility in the JPY and EUR markets on these days.
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Pictured: Federal Reserve Chairman Jerome Powell
The second trading week of 2022 is here and we bring you a regular recap of the most interesting economic data and events that took place last week.
On Tuesday and Thursday (4.1. and 6.2.) we focused our attention on data from Great Britain, which mainly concerned PMI indices:
Manufacturing PMI (Tuesday): 57.9 vs. 58.1
The report confirms continued growth in UK manufacturing towards the end of last year. Output and new orders both rose in December, although price pressures remain elevated.
Composite PMI (Thursday): 53.6 % vs. 57.6
This is the lowest reading since February for activity in services.
In Wednesday's Federal Open Market Committee (FOMC) meeting minutes, we learned that inflation continues to be well above the Fed's 2% target and the structural factors that have kept inflation low may reemerge once the effects of the pandemic subside.
Participants continued to highlight the uncertainties associated with the length of time it will take to resolve the supply chain situation.
On employment, most participants noted that the US labour market was very tight.
On Friday, we got data on US Nonfarm Payrolls, which measures the change in the number of people employed during the previous month, excluding agriculture. The household survey showed a very sunny picture of the labor market with unemployment falling and the employment to population ratio improving.
On Friday, we were also waiting for CPI (Consumer Price Index) data from the euro area, which measures the change in the price of goods and services from the consumer's perspective. Currently 5.0 % versus the previous 4.9 %.
We expect the first half of the week to be weaker on data. On Tuesday, we will expect ECB President Christine Lagarde to speak and later in the day, Fed Chair Jerome Powell to speak about the economic outlook and recent monetary policy actions before the Joint Economic Committee in Washington.
We will focus our attention mainly on the second half of the week, which will be a bit richer in economic data. On Thursday, the December PPI (Producer Price Index) and Initial Jobless Claims (which measures the number of individuals who filed for unemployment insurance for the first time during the past week) will come from the US.
On Friday, we expect data from the UK, which will focus on manufacturing production and the afternoon speech by ECB President Christine Lagarde.
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We bring you the first overview of the most interesting economic events we followed at the turn of the year!
We hope that you enjoyed the Christmas holidays and the New Year celebrations abundantly and to your liking. 😊
Now is the time to get back in front of your computers and keep an eye on what economic events may affect your trading.
We wish you pleasant reading and many profitable deals in 2022!
Last trading week was pretty poor for economic data thanks to the Christmas holidays and New Year celebrations. Still, a few results caught our attention.
Right on Monday (26 December) we focused our attention on the incoming Japanese annual retail sales data, which came out slightly more positive than the previous one (1.9 % actual vs. 0.9 % previous). Retail sales measure the change in the inflation-adjusted total value of sales at the retail level. It is a leading indicator of consumer spending, which accounts for the majority of total economic activity.
A day later, we got data on U.S. Pending Home Sales. The National Association of Realtors (NAR) Pending Home Sales report measures the change in the number of homes under contract to be sold but still waiting to close on the transaction, excluding new construction. This report does not have that much impact on currency, but it is interesting for a general overview of the US economy.
The first trading week of the New Year is usually slower to get going. This means we expect less volatility and frequency of economic news.
Earlier in the week, we will focus on UK PMI data and US Nonfarm payrolls data.
We can't wait for a good dose of economic events this year will bring!
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Welcome to the latest summary of the most interesting economic events of this business year!
We hope that you enjoyed the Christmas holidays in peace and family and we hope that you will celebrate the New Year properly, as it should be. 😊
We wish you lots of energy and success in the New Year 2022, not only in the field of trading. Make yourself proud!
Last trading week was in the Christmas spirit on the markets, which is why volatility was more moderate. Even so, we did watch some interesting data that came in before the holidays.
The start of the week (Tuesday) brought us Canadian Core Retail Sales data, which rose to a current value of 1.3 % (previous - 0.2 %). Generally, a higher value indicates a bullish sentiment for the currency. Then on Thursday, we had October GDP, which was slightly more positive (from 0.2 % to 0.8 %). Canadian GDP will likely offset the pandemic decline in Q1, but a return to trend will take time after 2022.
On Wednesday we focused on UK GDP data, which as expected offered no surprises and zero market catalysts.
Quarterly GDP: 1.1 % (forecast 1.3 %, previous 1.3 %)
Annual GDP: 6.8 % (forecast 6.6 %, previous 6.6 %)
On the same day (Wednesday), we watched GDP data from the US, which came out worse than last month (2.3 % vs. 6.7 %).
This week will be quiet in the markets due to the Christmas holidays and the start of the New Year 2022 celebrations.
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We bring you our regular Monday recap of the most interesting economic events we noted in the past trading week.
The first half of the week was weaker on fundamentals. The second half was mainly marked by interest rates, which moved the market decisively. The Fed in particular had its attention.
On Wednesday (15.12.) came the long-awaited data on the interest rate announcement from the USA, where the Fed left interest rates unchanged. At the same time, the Fed pledged to use a range of tools to support the economy at this challenging time. It wants to support its objective of maximum employment and maintaining price stability. The job market is a slight disappointment. Powell (Fed Chairman) said at his conference that the Omicron option is a definite risk, but still the US economy sees rapid growth. The path of the economy will continue to depend on the course of the virus. Advances in vaccination are expected to boost economic activity and increase employment.
The Committee plans to maintain the rate range between 0-0.25 % until labour market conditions reach an appropriate level. Thus, the long-awaited US equity market crash did not take place and in our eyes the Fed just postponed solving its problems.
A day later, we watched the UK interest rate announcement, where the long-in-the-air rate hike finally came. The Bank of England's Monetary Policy Committee set monetary policy to meet the 2% inflation target. Since the November meeting, the Omicron variant of Covid is again playing a role, which appears to be much more portable and poses new risks based on current knowledge.
On the same day, we could also watch the announcement of interest rates in the euro area, where the European Central Bank left rates unchanged. In support of its symmetric 2% inflation target and in line with its monetary policy strategy, the Governing Council expects the ECB's key interest rates to remain at current or lower levels until inflation reaches 2 %.
This week we expect less volatility in the markets through the Christmas holidays. The only economic data worth noting will come from the UK (Retail Sales, GDP) and US GDP on Tuesday and Wednesday.
There comes that time when you need to put business aside for a while and enjoy the holidays with your family.
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We bring you a regular overview of the most important economic events that influenced our trading in the second trading week of this month.
The first half of the week already offered us a number of interesting data on interest rates coming from Australia and Canada.
On Tuesday (7.12.2021) the RBA (Reserve Bank of Australia) left interest rates unchanged at 0.10 %. The Board decided at the meeting to hold the cash rate at 10 basis points and continue to purchase government securities at a rate of 4 billion per week until mid-February 2022. Household consumption is recovering strongly and the economy is expected to return to pre-Delta levels in the first half of 2022. However, there is a valid concern about the uncertainty surrounding the new version of the Omicron.
A day later, new data came in regarding interest rate changes from Canada, which also left them unchanged at 0.25 %, as expected. The BOC (Bank of Canada) continues to reinvest and maintain its holdings of government bonds. The economy continues to recover from the pandemic and grew by 5.5 % in the third quarter as expected. This suggests that the economy has gained considerable momentum. However, the Governing Council believes that the economy needs to continue to be supported significantly. As elsewhere, the Omicron has introduced new uncertainty.
At the end of the week, we were waiting for the incoming UK GDP data, which came in slightly worse than in November (0.1 % actual, vs. 0.6 % previous).
This week we expect increased volatility on currency pairs containing USD, GBP, EUR and JPY. The first half of the week will see data from the UK regarding the change in unemployment. Other important data awaits us in the second half of the week where we can expect the Fed's interest rate decision and GDP to come out of New Zealand. On Thursday, we will turn our attention to the EU interest rate decision. The end of the week is also likely to be more volatile as Japan will also offer us its interest rate decision.
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In the photo: RBA Governor Philip Lowe
Welcome to our regular Monday summary of the most important economic events that took place at the turn of the month.
USD
Earlier in the week, we focused on the output of US Federal Open Market Committee (FOMC) member Jerome Powell (Fed Chairman), who once again prepared his speech on inflation. Powell conveyed that the factors driving inflation higher are likely to persist through 2022. Inflation is well above target (2 %), pushed higher by pandemic-related supply and demand imbalances. Although the U.S. economy continues to strengthen, the new variant of the virus poses a problem for employment, feeding heightened uncertainty about inflation... Powell acknowledged that it is time to drop the term "transitory" for inflation. The risk of higher inflation is a risk to the return of full employment. Late in the week, data was released regarding US Nonfarm payrolls, which measures the change in the number of people employed, compared to last month, excluding the agricultural sector. Higher readings imply bullish sentiment, which we did not see as the actual readings came in much worse (210k vs. the previous 546k).
EUR
On Tuesday, we were awaiting data on the change in the Eurozone Consumer Price Index (CPI), which measures the change in prices of goods and services from the consumer's perspective. The actual reading came in slightly more positive (4.9 %) compared to the previous reading (4.1 %). Eurozone inflation surged to its highest level in 30 years, while the core reading is the highest on record in November, as rising energy prices are the main driver of price increases.
CAD
The same day (Tuesday) also saw the release of GDP data from Canada.
The month-on-month GDP result was slightly worse than the previous month (0.1 % actual vs. 0.6 % previous),
At the end of the week we were still interested in the change in the number of people employed. Job creation is an important indicator of consumer spending. In this respect, we were surprised when the actual result came out more positive compared to the previous month (153.7k vs. 31.2k). The unemployment rate is the lowest since February 2020 and the total number of jobs is now 186k above pre-pandemic levels.
What's in store for the current trading week?
This week, we will turn our attention to the interest rate decisions coming from Australia and Canada on Tuesday and Wednesday. We will expect a large dose of volatility in the AUD and CAD currency pairs on these days. Later in the week we will be waiting for data from the US regarding the change in GDP and the Consumer Price Index (CPI).
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Photo by Anna Tarazevich from Pexels
We bring you our regular Monday commentary on the economic events that affected our trading in the past trading week.
GBP
The beginning of the week (23 November) saw data from the UK, which brought changes to the Purchasing Managers' Index (PMI) for October 2021. In general, there were no major increases or decreases from previous readings. However, they were largely more positive than expected.
NZD
The main topic last week was the decision to change interest rates in New Zealand. As expected, the Reserve Bank of New Zealand (RBNZ) raised the cash rate by 25 basis points to the current level of 0.75 %. The Committee agreed that it remained appropriate to continue to reduce monetary stimulus to maintain price stability. A range of economic indicators demonstrate that the New Zealand economy is performing above its potential.
The RBNZ Governor, Adrian Orr, said at the meeting that a 25 basis point hike provides more options, but we need to be cautious given the huge debt.
In response to this news, the NZD started to react a little differently than we would have expected. In the second half of the week, it was weakening... This is probably due to the fact that the RBNZ was not hawkish enough. A rate hike was expected and Orr's rhetoric was rather balanced when he mentioned the huge debt.
USD
On the same day (24 November) came the GDP data from the USA. The quarterly result came out significantly negative from the previous 6.7 % to 2.1 1 %.
WORLDWIDE
In the first half of the week, the markets behaved somewhat normally and in their standard manner. However, this was disrupted by the major news of the spread of a new mutation of Covid from South Africa, which many experts consider to be a threat. Countries such as Italy, Germany and Japan tightened controls at airports and banned entry to travellers from South Africa.
The markets reacted to these "shocks" in a rather confused manner. In any case, we will watch how the situation develops and wait to see what trend the markets take.
What's in store for the current trading week?
Apart from the aforementioned monitoring of events regarding the new spreading mutation of the virus, we will turn our attention in the current trading week to Wednesday's data coming from the Eurozone (CPI) and to NFP coming from the US.
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English 
Czech 
Polish