The FOMC decision is already behind us and it has provided some clarity on the future path of US monetary policy. However, this path could change depending on data, especially price growth data. That's why the upcoming US CPI report for April will be watched closely by gold traders. GBP traders will focus on the UK Q1 GDP report while oil traders will follow discussions on the EU embargo on Russian oil. Be sure to watch GOLD, GBPUSD and OIL next week.
GOLD
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Create account Try a demo Download mobile app Download mobile appThe FOMC decision was mostly in-line with market expectations. Announced pace of balance sheet run-off was slightly lower than expected and Powell said that 75 bp rate hikes are not actively considered now. This pushed USD lower and supported gold price. However, Fed's view on future rate hikes may change depending on whether current rate hikes slow inflation or not. Next US CPI report, including data for April, will be released this Wednesday at 1:30 pm BST. Market expects a slowdown in both headline and core price growth measures.
GBPUSD
The British pound slumped on Thursday after the Bank of England warned that the UK economy may be facing recession. Nevertheless, even such a gloomy outlook did not discourage the Bank of England from delivering a fourth rate hike in a row. Investors will be offered an update on the UK economy this Thursday at 7:00 pm BST as the GDP report for Q1 2022 will be released. Market expects expansion but it should be noted that some European countries have disappointed with growth in Q1 2022. UK disappointment may exert even more pressure on beleaguered GBP.
OIL
Discussions on EU embargo on Russian oil are gaining momentum. Consensus among EU member states has not been reached this week but discussions are said to be on the finish line. Some countries are unwilling to support a full embargo but the EU tries to appease them by offering temporary exemptions. Oil prices continued to increase this week and should the final decision on the Russian oil embargo be made next week, crude prices may experience a spike. Nevertheless, all will depend on details like length of extensions or what oil-related services will be targeted along imports.
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