Week’s main events (February 19 – February 23)

Traders will scrutinize the FOMC minutes this week and look for clues as to when the Federal Reserve will start cutting interest rates. At the same time, the S&P Global PMIs flash index for the US will assess this month’s economic performance. In addition to the US, attention will be on flash PMIs for the Eurozone, Germany, the UK, and Japan. The Ifo business climate indicator in Germany and the inflation rate in Canada and the Eurozone will also be in focus. Earnings at chipmaker Nvidia (NVDA) will test the artificial intelligence fever that has boosted US stocks in recent months, while Walmart (WMT) will kick off earnings at the biggest US retailers.

Monday, February 19

Monday will be a weakly volatile day. Monday is a bank holiday in the US and Canada, while no important economic events are expected in Asia and the Eurozone.

Tuesday, February 20

In Tuesday’s Asian session, China will release PBoC prime rate data, which is significant for Asian indices. The bank is expected to keep rates at current levels, which could trigger a wave of disappointment among investors who expect more decisive measures from the PBoC amid prolonged deflation. Also in the spotlight will be inflation data in Canada. Inflation is expected to decline slightly, but there could be surprises. Any hint of resilience in inflation could lead to a rise in the Canadian dollar because the Bank of Canada will hold rates longer. Also, on Tuesday, the US retailers will begin reporting earnings. Walmart (WMT) will report results before the market opens on Tuesday.

Main events of the day:

– Australia RBA Monetary Policy Meeting Minutes at 02:30 (GMT+2);
– China PBoC Prime Rate (m/m) at 03:15 (GMT+2);
– Switzerland Trade Balance (m/m) at 09:00 (GMT+2);
– Canada Consumer Price Index (m/m) at 15:30 (GMT+2).

Wednesday, February 21

On Wednesday, investors will focus on the FOMC Meeting Minutes. The January FOMC protocol may give investors some indication of when the US Fed will make its first rate cut, especially after recent comments from policymakers pointing with one voice to holding rates for as long as possible. Recall that at the January 30-31 meeting, policymakers left borrowing costs unchanged, indicating that a rate cut at the upcoming March meeting was unlikely. If the official document confirms the US Fed’s intentions to push back rate cuts to the summer, it could cause a sharp rise in the US dollar. Nvidia (NVDA) will report earnings on Wednesday after the US market closed, which could be a crucial test of market sentiment given the company’s size and place at the center of the hype surrounding the financial prospects of artificial intelligence.

Main events of the day:

– Japan Trade Balance (m/m) at 01:50 (GMT+2);
– Australia Wage Price Index (m/m) at 02:30 (GMT+2);
– US FOMC Member Bostic Speaks at 15:00 (GMT+2);
– US FOMC Member Bowman Speaks at 20:00 (GMT+2);
– US FOMC Meeting Minutes at 21:00 (GMT+2).

Thursday, February 22

Thursday will bring various Manufacturing PMI and Services PMI statistics for many countries. These data reflect well the dynamics of the domestic sectors of the economy. On Thursday, the Eurozone Consumer Price Index will also be at the center of investors‘ attention. Inflation is expected to remain at about the same levels. However, any deviations from expected values may cause increased volatility. As a rule, if actual inflation is higher than forecasted, it leads to the growth of the national currency and vice versa. Market participants should also pay attention to the US Initial Jobless Claims and Retail Sales data in Canada and New Zealand. A strengthening of the local currency usually accompanies an increase in retail sales, indicating that consumers can afford to spend more, indicating a healthy economy.

Main events of the day:

– Australia Manufacturing PMI (m/m) at 00:00 (GMT+2);
– Australia Services PMI (m/m) at 00:00 (GMT+2);
– Japan Manufacturing PMI (m/m) at 02:30 (GMT+2);
– Japan Services PMI (m/m) at 02:30 (GMT+2);
– German Manufacturing PMI (m/m) at 10:30 (GMT+2);
– German Services PMI (m/m) at 10:30 (GMT+2);
– Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+2);
– Eurozone Services PMI (m/m) at 11:00 (GMT+2);
– UK Manufacturing PMI (m/m) at 11:30 (GMT+2);
– UK Services PMI (m/m) at 11:30 (GMT+2);
– Eurozone Consumer Price Index (m/m) at 12:00 (GMT+2);
– Eurozone ECB Monetary Policy Meeting Minutes at 14:30 (GMT+2);
– Canada Retail Sales (m/m) at 15:30 (GMT+2);
– US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
– US Manufacturing PMI (m/m) at 16:45 (GMT+2);
– US Services PMI (m/m) at 16:45 (GMT+2);
– US Existing Home Sales (m/m) at 17:00 (GMT+2);
– New Zealand Retail Sales (m/m) at 23:45 (GMT+2).
– US Natural Gas Reserves (w/w) at 17:30 (GMT+2);

Friday, February 23

On Friday, Germany will publish the GDP data for the quarter. Germany is already in a technical recession so negative values will hurt the German Index DE40. Investors may also be interested in the Singapore inflation report. It is expected to be unchanged, but volatility on currency pairs with SGD may increase. It’s a bank holiday in Japan.

Main events of the day:

– US FOMC Member Cook Speaks at 00:00 (GMT+2);
– US FOMC Member Kashkari Speaks at 00:00 (GMT+2);
– Singapore Consumer Price Index (m/m) at 07:00 (GMT+2);
– German GDP (q/q) at 09:00 (GMT+2);
– Switzerland Employment Rate (m/m) at 09:30 (GMT+2);
– German IFO Business Climate (m/m) at 11:00 (GMT+2).

by JustMarkets, 2024.02.19

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