It will be a volatile week. The main event this week for investors will be the US nonfarm payrolls. Signs of cooling in the US labor market may increase the likelihood of a rate cut from the Fed in late April. The Bank of Canada (BoC) and the European Central Bank (ECB) will meet this week. Both banks are expected to keep rates unchanged, so the focus will be on the bank's inflation forecasts and officials' press conference speeches. Before Friday's jobs report, Jerome Powell (US Fed Chair) will appear before a House committee on Wednesday and a Senate panel on Thursday to present the central bank's report on monetary policy. Given recent data pointing to the economy's strength, Powell is expected to reiterate that policymakers will take a cautious approach when deciding whether to start cutting interest rates.
Monday, March 4
On Monday, traders will mainly focus on the Swiss inflation data. Inflationary pressures are expected to fall from 1.3% to 1.1% annually. Lower inflation may put pressure on the Swiss franc, increasing the likelihood of a rate cut by the SNB. Volatility on currency pairs with the CHF will increase.
Main events of the day:
- – Switzerland Consumer Price Index (m/m) at 09:30 (GMT+2);
- – US FOMC Member Harker Speaks (m/m) at 18:00 (GMT+2).
Tuesday, March 5
On Tuesday, several countries will report on business activity in the service sector. No significant changes are expected. However, this could lead to increased volatility at the time of publication. The Tokyo inflation report, a precursor to overall inflation in the country, is worth noting. Inflation in Japan’s capital is expected to rise sharply from 1.6% to 2.5% annually, increasing the probability of the first rate hike from the Bank of Japan in April. For the JPY, this could be a foundation for appreciation.
Main events of the day:
- – Australia Services PMI (m/m) at 00:00 (GMT+2);
- – Japan Tokyo Core CPI (m/m) at 01:30 (GMT+2);
- – Japan Services PMI (m/m) at 02:30 (GMT+2);
- – China Caixin Services PMI (m/m) at 03:45 (GMT+2);
- – Germany Services PMI (m/m) at 10:55 (GMT+2);
- – Eurozone Services PMI (m/m) at 11:00 (GMT+2);
- – UK Services PMI (m/m) at 11:30 (GMT+2);
- – Eurozone Producer Price Index (m/m) at 12:00 (GMT+2);
- – US ISM Services PMI (m/m) at 17:00 (GMT+2);
- – US FOMC Member Barr Speaks (m/m) at 19:00 (GMT+2);
- – US FOMC Member Barr Speaks (m/m) at 22:30 (GMT+2).
Wednesday, March 6
The Bank of Canada's monetary policy meeting will be the critical event on Wednesday. The Bank of Canada is expected to keep rates unchanged. The trader needs to see what bias the bank's statement will have. A hawkish bias is likely to drive the Canadian currency higher. Conversely, a dovish bias will increase the probability of a rate cut soon, putting pressure on the Canadian currency. Investors should also listen carefully to Jerome Powell's speech to the US Congress. His comments will be scrutinized for hints as to when the US central bank intends to cut its first rate. Also, the US JOLTs Job Openings report will be released on Wednesday. The drop in the number of vacancies will indicate some cooling of the US labor market.
Main events of the day:
- – Australia GDP (q/q) at 02:30 (GMT+2);
- – German Trade Balance (m/m) at 09:00 (GMT+2);
- – German Retail Sales (m/m) at 09:00 (GMT+2);
- – UK Construction PMI (m/m) at 11:30 (GMT+2);
- – Eurozone Retail Sales (m/m) at 12:00 (GMT+2);
- – UK Spring Forecast Statement at 14:30 (GMT+2);
- – US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+2);
- – Canada BoC Interest Rate Decision at 16:45 (GMT+2);
- – Canada BoC Rate Statement at 16:45 (GMT+2);
- – Canada Ivey PMI (m/m) at 17:00 (GMT+2);
- – US JOLTs Job Openings (m/m) at 17:00 (GMT+2);
- – US Fed Chair Jerome Powell Testifies at 17:00 (GMT+2);
- – Canada BoC Press Conference at 17:30 (GMT+2);
- – US Crude Oil Reserves (w/w) at 17:30 (GMT+2);
- – US FOMC Member Daly Speaks (m/m) at 19:00 (GMT+2).
Thursday, March 7
Thursday will be a quieter day before the critical Friday report. The main event will be the European Central Bank meeting. No changes in policy are expected. At the same time, the ECB refused to talk about lowering rates this spring. So, the main focus of investors in this case will be on the speech of the ECB head, Christine Lagarde. Also, on Thursday, US Fed Chair Jerome Powell Powell will deliver semi-annual testimony on monetary policy to a Senate committee.
Main events of the day:
- – Australia Trade Balance (m/m) at 02:30 (GMT+2);
- – China Trade Balance (m/m) at 05:00 (GMT+2);
- – Switzerland Unemployment Rate (m/m) at 08:45 (GMT+2);
- – Eurozone ECB Interest Rate Decision at 15:15 (GMT+2);
- – Eurozone ECB Monetary Policy Statement at 15:15 (GMT+2);
- – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
- – US Trade Balance (m/m) at 15:30 (GMT+2);
- – Canada Trade Balance (m/m) at 15:30 (GMT+2);
- – Eurozone ECB Press Conference at 15:45 (GMT+2);
- – US Fed Chair Jerome Powell Testifies at 17:00 (GMT+2);
- – Eurozone ECB President Lagarde Speaks at 17:00 (GMT+2);
- – US Natural Gas Storage (w/w) at 17:30 (GMT+2);
- – US FOMC Member Mester Speaks (m/m) at 18:30 (GMT+2).
Friday, March 8
The most important Friday’s release is the US Nonfarm Payrolls report. This data can trigger increased volatility in the market, and the Fed also considers this indicator to adjust monetary policy. The labor report is expected to be weak compared to the previous month, while wage growth may slow. This situation will indicate a cooling of the labor market and fuel speculation of a sooner rate cut by the US Fed. In turn, a strong report will indicate a robust labor market, pushing back the possibility of a rate cut and giving confidence to the USD. Also, on Friday, Canada will report labor market data. Here, we should act by analogy - a strong report is good for the currency, and a weak report is terrible for the CAD.
Main events of the day:
- – German Industrial Production (m/m) at 09:00 (GMT+2);
- – German Producer Price Index (m/m) at 09:00 (GMT+2);
- – Eurozone GDP (q/q) at 12:00 (GMT+2);
- – US FOMC Member Williams Speaks (m/m) at 14:00 (GMT+2);
- – US Nonfarm Payrolls (m/m) at 15:30 (GMT+2);
- – US Unemployment Rate (m/m) at 15:30 (GMT+2);
- – Canada Unemployment Rate (m/m) at 15:30 (GMT+2).
by , 2024.03.04
We advise you to get acquainted with the daily forecasts for the major currency pairs.This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.
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