Deluge of US data, Powell to shape Fed expectations [Video]
|Appetite in Asian equities improved on hints that China could ease the excessive Covid curbs as a response to angry anti-Covid protests, but appetite for rest of the market was limited before a deluge of US economic data and Federal Reserve (Fed) President Jerome Powell’s speech due between today and the end of the week.
Investors will be watching the latest US GDP update, the JOLTS job openings, ADP report today, the US PCE, personal income and spending on Thursday, and US NFP and unemployment rate on Friday.
Soft inflation and not too strong data is what the market needs to keep positive.
But in all cases, it’s possible that we won’t see US equities extend gains by much, and we can see the S&P500 headed lower from the 200-DMA, which also coincides with the year-to-date descending channel top.
Good news is that both a softer Fed due to a potentially softening inflation, or soft economic data in the US, should be negative for the US dollar, and could finally help the dollar ease against major currencies, hence ease the strong-dollar-led-high-inflation in the rest of the world. Due today, investors will have their eyes set on the Eurozone’s preliminary inflation data for November. Who knows, maybe we will see a figure below 10%, in which case, the EURUSD could make another attempt above the 200-DMA which stands near 1.0370.
But as I always say, the US data, and Jerome Powell will say the last word on the overall direction in currency markets. Strong US data, and hawkish Fed comments could immediately turn the winds in favour of a stronger dollar yet again.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.