Market Analysis: Week Ahead (30.01.2023)

Market Analysis: Week Ahead (30.01.2023)

Important Upcoming Week in the Financial Markets

By Neofytous Hadjineofytou

This week will be interesting in the financial markets worldwide! We have the ongoing quarter earnings releases, the Fed’s Interest rate in the US followed by the BOE Monetary Policy and ECB refinancing rate. Then we have major data releases, from both Europe and the US!

Major volatility is expected all day Wednesday February 1st, 2023! PMI data announcements from all Europe will be released, then we have the monthly level of employment data release in the US (excluding the farming industry), Monthly Job openings and the awaited Federal funds rate decision, otherwise known interest rate decision!

The following day Thursday, BOE Monetary Policy (interest rate) and followed by the ECB’s Main refinancing rate (interest rate)! Finally, Friday the NFP, Unemployment rate and Hourly earnings (minimum wage) data will be released from the US.

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For both the eurozone and England the forecast states an increase in the current interest rate of .50%. In the US, the forecast is for another .25% increase! Most economists will agree that the decision for a rate hike comes as no surprise because of the ongoing rising inflation worldwide!

Let’s look at the numbers: US last inflation measurement 6.5%, the Fed’s will prefer it to be at 2-2.5% UK Last inflation measure 10.5% a 41 year all time high! Ideal 2% to 3% ECB Last inflation measure 6.3% The ECB projected to decrease to 3.4% by 2024

What we need to pay attention to is the effects of the ongoing hike rate. It can pave the way for a recession! Economists believe there will be a mild recession in the US, in UK however, it was estimated that recession started from the third quarter of 2022! Fears of rising unemployment and Economic contraction is underway for UK.

In Europe, ECB president Lagarde admitted the elevated level of inflation, yet optimistically stated that signs of recession are not visible yet! Let’s all pay attention to what will happen this week!

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