Forecasting the Coming Week: Enter… the Fed!

It was quite a dull week when it comes to price action in the FX galaxy, particularly in the G10 space. The (widely anticipated) lack of surprises at the BoJ event, coupled with the unemotional tone from the ECB, also contributed to the broad-based sidelined theme. Next week, all the attention is expected to be on the FOMC gathering, while the BoE meeting should also grab some interest.

In the US, the Conference Board will publish its always-relevant Consumer Confidence for the month of January (January 30). The ADP, the Fed event, and Chief Powell’s press conference are on January 31, and it is largely expected to keep its FFTR unchanged. Usual weekly Initial Claims are due on February 1 prior to the key ISM Manufacturing PMI, while Nonfarm Payrolls, the Unemployment Rate and the final Michigan Consumer Sentiment index are all due on February 2. In line with the rest of its peers, the greenback maintained an erratic performance throughout the week, leaving the USD Index (DXY) hovering around the low 103.00s.

In Euroland, advanced Q4 GDP Growth Rate in Germany and the broader euro bloc is due on January 30. Still in Germany, Retail Sales, the labour market report, and the advanced Inflation Rate come on January 31. February’s docket kicks in with the release of the final Manufacturing PMI in Germany and the euro area, as well as the preliminary Inflation Rate in the whole bloc. EUR/USD also traded in an erratic fashion, although always with a gradual decline, which ended in the second consecutive week of losses.

In the UK, Mortgage Approvals are first in line (January 30), seconded by Nationwide Housing Prices on January 31. The final Manufacturing PMI and the BoE gathering are expected on February 1. GBP/USD managed to cling to positive territory in the weekly chart, regaining the 1.2700 zone.

The Japanese docket will see the release of the Unemployment Rate on January 30, ahead of the BoJ Summary of Opinions, flash Industrial Production figures, Consumer Confidence, Housing Starts and Retail Sales, all due on January 31. The usual weekly Foreign Bond Investment will close the calendar on February 1. USD/JPY halted three consecutive weeks of gains, although it maintained the trade in the area of recent peaks north of 148.00.  

In Australia, Retail Sales will be in the limelight on January 30, followed by the key Inflation Rate in Q4, Housing Credit, the Monthly CPI Indicator and the final Judo Bank Manufacturing PMI, all on January 31. Building Permits come on February 1, and Home Loans and Investment Lending for Homes are seen on February 2. Despite AUD/USD keeping the consolidation in place, it could not help closing its fourth consecutive week of losses.

In China, the NBS Manufacturing PMI and the Non-Manufacturing PMI are due on January 31.

Regarding central banks, both the Federal Reserve and the Bank of England (BoE) are expected to keep their policy rates unchanged at their gatherings on January 31 and February 1, respectively.