The opening week of 2022 looks as though it’s going to be a volatile one as there are some significant data events diarised.
The twin factors concerning markets : COVID and inflation will continue to be a focus in 2022 and the resulting action from central banks over inflation remains controversial.
Many would argue that the central banks are behind the curve in inflation and curbing inflation is a central tenet for having a central bank.
The ECB dithering has cost the EUR against the USD as has the lockdowns on the continent and the continued inactivity from the ECB is likely to provide a continued cap on EUR/USD for the early part of the new year. This week’s CPI will provide further clues as to how far the ECB are behind.
FOMC minutes are due on Tuesday and they will be scoured for clues as to when the Fed will raise rates (market expectations are for 3 in 2022).
The end of the week will show the state of employment in the USA and likely to show a continuation of Novembers job creation slowing but also a drop in unemployment rate.
Commodities enjoyed a decent end to the year with supply constraints being the biggest driver of the price. Additionally the oil price continues to hold up well given the resurgent COVID strains giving rise to growth concerns, OPEC+ meet on Tuesday however changes are unlikely as a result of the above fears.
Retail Sales Germany
ISM Manu PMI
Initial Jobless Claims
ISM Services PMI
Non Farm Payrolls
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