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Big week for data and rate decisions
If last week was data light this one is very heavy and important.
We have two central banks deciding on rates (and the market is convinced that they will both move rates up by 25bps.) along with inflation rate, unemployment in Europe and JOLTS and Non Farm payrolls in the US.
Last week the PCE did show an ease month on month but equally as expected the core came in slightly higher than market predictions – 4.6% against 4.5% showing that inflation remains resilient overall even if monthly readings will show declines. Thus the FED are likely to move 25bps and retain their bullish stance to the end of the year.
The Japanese retained its ultra easy monetary policy but will remove forward guidance which can be perceived as early steps towards unwinding the policy – however the market is focussed on the present and the yen depreciated over the week.
The JOLTS and non farms are both important as gauges of the resilience of the US economy and both are expected to show the American economy slowing and unemployment creeping up, we should be wary that the market being pre-positioned for this outcome and thus vulnerable to data that doesn’t follow expectations.
The market is confident in its views and that is slightly worrying.
OPEC+ cannot be happy with the oil price action the market seems to be more pessimistic for demand than fearing further output cuts and although holding the $75 level presently there does appear to be bearishness creeping in. Will be interesting to see OPEC+ reaction to a sustained breach of technical support of $73.5.
Platinum struggled to hold its recent highs despite a lot of bullish news although Stillwater mine in Montana was back online providing supply and dropped $50 on the week – another commodity that needs to hold support to give the market confidence.
ISM Manufacturing PMI
JOLTS Jobs Openings
ISM Services PMI
FED Interest Rate Decision
ECB Interest Rate Decision
Balance of Trade
Non Farm Payrolls
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