The upcoming week will be full of macroeconomic publications and events! On the top of that other crucial central banks like Fed, BoE, SNB and BoJ will publish their decisions on monetary policy. We could notice a picked up volatility on the market, so you can expect to see even more in the coming days due to the number of key market events. Many markets will experience sizable movements this week, but in our opinion, markets such as GOLD, GBPUSD and US500 are worth a look.
Gold
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appNext week will be extremely interesting for investors due to the interest rates decisions of key central banks. For the gold market, the Fed and BoJ will be crucial. The Fed is expected to hold interest rates on Wednesday, which in theory should be supportive for gold. The ECB raised interest rates, but signaled the end of hiking cycle. Moreover, the BoJ will also make a decision on Friday. The market does not expect any change, but Ueda indicated in a recent interview that an exit from negative interest rates may be warranted by the end of this year. A hawkish BoJ could mean declines in the USDJPY. A weaker dollar could also mean a recovery in gold.
US500
The US500 index is at an interesting technical structure that could simultaneously indicate a medium-term uptrend or downtrend. Wednesday's session and the Fed's decision will bring us the publication of the latest dot-plot chart, which will indicate the Fed's attitude towards current economic conditions. The bankers' revised projections for the path of monetary tightening could prove to be a key factor for the future performance of US stock indices in the medium term.
GBPUSD
The Fed is not the only bank to make a decision on interest rates. On Thursday, we await the BoE decision, which seems to be a bigger puzzle than the FOMC decision. The situation in the UK is tough, with bankers there facing huge wage pressures, which is an important pro-inflationary factor. On the other hand, GDP data points to a further deceleration of the economy. Markets are pricing in a near 69% probability that the BoE will raise rates by 25 basis points, but economists' votes are somewhat divided on this point. One thing is certain, the decision itself could significantly increase volatility on the GBPUSD pair on Thursday.
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.
