Economic data and CBDC | IFCM UAE
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Economic data and CBDC

The week ahead will about heavy economic data, especially PMI data. At the same time, PBoC Loan Prime Rate on Monday and SNB Interest Rate Decision on Thursday are the focus banks. This week also will be a virtual meeting of the Bank for International Settlements (BIS), which will get the most attention of crypto traders. Let's take a short survey now that we are going to wait for in the coming days.

PBoC & SNB

People's Bank of China (PBoC) Loan Prime Rate is not expecting to be changed on Monday. Last week, when the FOMC had an interest rate decision, PBoC members warned about thinning monetary policy in the current situation, which led to the expectation of a dovish tone still and a lower interest rates policy. The current 3.85% rate is expecting to be held. The same scenario we are hoping to see from SNB holding the -0.75%.

Purchasing Managers' Index (PMI)

PMI Index measures the activity level of purchasing managers in both Service and Manufacturing sectors. A reading above 50 indicates expansion in the industry, and below 50 indicates contraction.

PMI preliminary data of major developed industries will be out on Wednesday. For both sections, the market expects another rise, slower in the EU zone, and much better gain in UK and US. However, for EZ, the downward surprise is not too far-fetched, especially for the service section. The new rise in infected numbers across Europe caused many of them to continue lockdowns. Still, for the US and UK, better vaccination progress raises the expectation.

CPI and Bond Auction!

After recent weeks' worried about CPI and Yields, this week, Wednesday and Thursday, Germans and Italian Bunds and BTP 10-Year Auction will be closely watched. On the CPI front, Wednesday, UK inflation data will be out, and the market is expecting nudging up slightly. In Japan, usually, Tokyo CPI numbers are following more closely than national CPI. Like the UK, we are also waiting for a bit higher numbers for both headline and core CPI in Tokyo's numbers. Despite the slight gain and progress in both countries, expecting Hawkish decisions from BoJ and BoE still be very soon.

On Wednesday, South Africa and Malaysia will also publish the CPI numbers. We are expecting a bit of gain in S. Africa and weaker numbers in Malaysia.

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Employment!

Employment data is one of the main indicators that central banks are watching closely for their future monetary policies. In the UK, while the unemployment rate for January is expecting to fall to 5.2% from the previous 5.1%, in the US, another decrease in the initial jobless numbers is expecting and market pricing on the Labor market's progress. As we saw in February Monetary Policy Report forecast, the Bank of England’s report summary pointed out that the near-term rise in the unemployment rate "will be more moderate than suggested by the MPC's February Report projections." But in the US, reopening is much faster than in other economies, which will affect the labor market very much.

US data!

Existent and new home sales on Monday and Tuesday, PMI data on Wednesday, and PCE data on Friday are the most important data we are waiting for from the US; however, 2020 Q4 GDP numbers will focus on Thursday. 7.5% fall in Feb. (MoM) Personal Income after 10% jump of January, still puts it 4.3% higher than the pre-pandemic level. Q4 GDP is expected to be seen at 4.3% after a huge recovery of 33.4% in the third quarter.

Tuesday and Wednesday API and EIA data from the US will also be watched closely by energy traders. It is expected to see another decline in the inventory levels, both in private and official numbers.

Important Speeches

ECB President Laggard Speaks on Thursday, and Federal Reserve Chair Jerome Powell testify on the economic outlook and recent monetary policy actions before the Joint Economic Committee in Washington DC.

Retail sales! - USD, AUD, CAD

Retail sales are usually followed closely by market participants. It is one of the main indicators that can tell us the future GDP number and confirm whether the economy is on the right foot or no. US retail sales on Tuesday is the most important data before the FED meeting, and it's expected to fall 0.6% in February. However, thanks to $1,400 checks of Biden's stimulate package, retail sales are expected to rise again in March and April. Australian and Canadian retail sales data also will be published on Friday, and same as the USA, for both of them also soft reduction is expected to see.

And the Digital world!

One of the most important events of the coming week is a web-based conference held by the Bank for International Settlements (BIS): "Innovation Summit 2021: How can central banks innovate in the digital age?” The main topic will be the central bank digital currencies (CBDCs). For crypto traders and investors, this event must be watched closely. Any progress in this meeting will affect the crypto markets directly. Global leaders of retail payments, central bank digital currencies, banking, and the new digital ecosystem, decentralized finance, data, analytics, AI and, cloud technologies will also be there.

Source: https://tradeproskills.com

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02/12/23

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