Week Ahead – Fed Minutes Headline a Data-Heavy Week

It was a beneficial week for the US dollar, which charged higher after data revealed US inflation is not cooling down as quickly as investors had hoped. Traders were forced to unwind bets of imminent Fed rate cuts in the aftermath, lending the dollar strength through the interest rate channel.

Weekly Economic & Financial Commentary: Central Banks on Hold for Longer?

We explain why we think the FOMC is still on pace to cut rates by 25 bps at its May 1 meeting despite this week's higher-than-expected print on CPI inflation in January. We look for the European Central Bank to reduce its policy rate by 25 bps on April 11. That said, we readily acknowledge that both central banks could wait longer to ease policy than we currently anticipate.

Week Ahead Europe – Eurozone Inflation and PMI Surveys Eyed

The European Central Bank is arguably closer than any other at this point to pulling the trigger on an easing cycle and while the odds of a cut, in the markets, are still low, they could improve if we see a significant revision to the January inflation data on Thursday.

Week Ahead North America – FOMC Minutes Key, Canadian Inflation in Focus

The mixed data since the last meeting though makes the FOMC minutes – released on Wednesday – all the more interesting. March appears unlikely for the first cut but the minutes could tell us how close policymakers think they are.

The Weekly Bottom Line: Inflation Progress Stalls and Spending Falls in January

This week saw some key data releases to help gauge the state of the U.S. economy at the start of 2024, and the likely timing of a Fed rate cut. Among them were the CPI inflation and retail sales reports for January. While inflation was higher than expected, retail spending came in notably lower. Markets reacted strongly to the inflation data with stocks falling sharply and treasury yields rising.

Forex and Cryptocurrencies Forecast

The macroeconomic statistics released last week were mixed in both the United States and the Eurozone. As a result, EUR/USD failed to break through either the 1.0700 support or the 1.0800 resistance, continuing to move within a narrow sideways channel.

Aussie Gets Knocked Down, Gets Back Up Again

The Australian dollar printed 3-month lows at 0.6443 last week in the wake of elevated US CPI data but was able to recover its lost ground over the week. This week’s focus will be on the reopening of mainland China markets and Australian Q4 wages data.

Swedish Inflation Data Kicks Off the Week

This morning we will get Swedish inflation data for January. We expect an increase in CPIF inflation to 3.2% y/y, while core inflation (CPIF excl. Energy) should fall to 4.4% y/y.

News Flow is Thin and Will Stay So for the Remainder of the Day

News flow is thin and that will stay so for the remainder of the day. Volumes are further reduced by the US public holiday (President’s Day), suggesting some sentiment-driven trading within existing technical ranges. Later this week, attention shifts to an ECB tracker of negotiated wages (tomorrow), Minutes of previous Fed (Wednesday) and ECB (Thursday) meetings and global February PMI’s (Thursday).

Gold Tests Tricky Area Within 38.2% Fibonacci

Gold is moving higher again today, recording its third consecutive green candle after bouncing off the 1,984 support level. It is currently testing the 38.2% Fibonacci retracement level of the up leg from 1,810 to 2,145 at 2,016 and the 20-day simple moving average (SMA) at 2,024.