Three markets to watch next week (28.01.2022)

7:04 PM January 28, 2022

Fed meeting is already behind us but it does not mean that central banks are out of the agenda. Investors will be offered rate decisions from the Bank of England and European Central Bank this Thursday with the UK central bank expected to deliver a rate hike. Apart from that, attention will also be focused on the US jobs report for January and Wall Street earnings. 

EURGBP

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European Central Bank and Bank of England will announce rate decisions this Thursday at 12:45 pm GMT and 12:00 pm GMT, respectively. While ECB is expected to stay on hold with Lagarde repeating that rates are unlikely to change this year, things look more interesting in case of BoE. Markets price in 80% chance of BoE increasing rates after UK inflation surged in December. GBP has strengthened against EUR on rate hike expectations and trades near the lower limit of a multi-year range.

US100

Earnings season on Wall Street is on a roll. While investors were already offered reports from companies like Microsoft, Apple or Tesla, more big tech earnings will report earnings next week. Alphabet will report earnings on Tuesday, Meta Platforms (Facebook) on Wednesday and Amazon on Thursday. In each case a report will be released after the close of the session. So far, big tech companies reported solid earnings but failed to revive the uptrend on US100. Will it be the same this time?

USDCAD

As a new month begins, new set of US employment data will be released. NFP report for January will be released this Friday at 1:30 pm GMT. Market expects an addition of just 240k jobs and acceleration of wage growth beyond 5% YoY. That would be a puzzling combination for Fed as weaker jobs growth could make them reconsider hawkish stance and faster wage growth could confirm conviction that tightening is needed. As usual, Canadian jobs report will be released simultaneously, ensuring short-term volatility jump on USDCAD.

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